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China Issues 5G Licenses, To Roll Out Upgrades On A Much Larger Scale

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As embattled Huawei struggles to overcome the US blacklisting that has caused a setback in its business globally, China granted licenses to three major telecom operators for them to commence deployment of 5G cellular network technology. These approvals will benefit vendors like Huawei technologies to support China’s 5G upgrade.

The three companies were granted trial in 2018 and a timeline to commence operations was slated for 2020, but the recent announcement gives the go ahead for a deployment ahead of the stipulated timeframe. The carriers include China Mobile, China Unicom and China Telecom, as well as the state-owned broadcaster, China Broadcasting Network Corporation Ltd, Reuters reported.

The accelerated deployment of the 5G rollout would put Huawei back in business as the Trump administration championed a campaign encouraging its allies to drop their business dealings with the Chinese owned technology for fear of using the Huawei equipment for surveillance. Huawei has repeatedly refuted this claim with a stance that it works independently as a private firm and has no ties with Beijing. 

China is accelerating the licensing to deploy 5G on a large scale to stay ahead of other countries in technology. 5G is touted as the opening field for technologies like artificial intelligence and autonomous driving.

Huawei last week launched a 5G lab in South Korea without the attendance of the media, given its murky relationship with Washington and its allies. The tech firm says it’s ready to commence the upgrade for China’s 5G build-out. Reuters reported that the tech firm has signed 46 5G commercial contracts in 30 countries and has shipped over 100,000 5G base stations.

However, it is likely that Huawei might face some hiccups due to the US ban. The ban demands an approval from the US government for sales of components. Android has withdrawn its license from Huawei technologies; South Korea is in a fix between both warring factions. China has given a go ahead; however, the tech firm will need supplies from American firm and its allies.

We remain concerned that if the US export ban on Huawei remains in place for some time, and is even extended to other Chinese tech companies, it will be very difficult for China to build 5G in scale. The action by China to accelerate 5G licensing does not remove or alleviate this risk,” Jefferies said in a note. 

5G services already operates in limited areas in the UK, US and South Korea. China says it plans to offer 5G services in over 40 cities in the country before the end of September.

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