Is China Winning the 5G Race?

Wed, Jan 9, 2019 - 2:07pm

Financial Sense Insider spoke with Senior Managing Director at 13D Research—and all around tech expert—Woody Preucil to get the scoop on 5G; what exactly the technology is and to find out just how high the stakes are surrounding 5G.

You may have heard the term loosely tossed into conversation or floating around the internet, but what exactly is 5G and how is it different from say 4G or 3G? Preucil explained that 5G is a key technology because it has the power to harness and “link various other exponential technologies together [and] it’s up to 100 times faster than 4G with virtually no latency.”

Preucil added that it’s a highly reliable bandwidth communications link that can create faster response times, more customized products and highly personalized service. It’s so powerful that it has the “potential to reshape the landscape of telecommunications firms… it could replace cable and traditional wire line internet connections” in the near future.

China and 5G

The major Chinese tech company, Huawei, has invested quite a lot into 5G since its initial interest in 2009 and has been actively working on the technology since 2013. Preucil believes “from an economic competition standpoint, because Huawei has been investing ahead of everybody else, they are poised to be a world leader, if not the world leader, in 5G networks.”

If Huawei and, in effect, China do indeed become leaders in the 5G and technological world, it will create a ripple effect where China is not only threatening America’s technological leadership, but issues of cyber security and cyber warfare also arise.

Preucil explained “if China is able to develop widespread 5G first, it could be in a better position to experiment with autonomous cars and other emerging technologies [and thus] threatening America’s technology leadership.”

From the U.S. standpoint on issues of cyber security and cyber warfare, Preucil said the concern is that Huawei’s development of a widespread 5G network allows China to become an advanced leader in global technologies, which will then go hand in hand with the development of sophisticated cyber capabilities.

Is the U.S. Falling Behind?

Well, not exactly. Verizon and AT&T are rolling put 5G now on a limited basis. Verizon started selling a fixed 5G wireless service in a few cities. AT&T is providing 5G in 12 cities and T-Mobile and Sprint plan to turn on their networks by mid-2019.

China, however, doesn’t plan to start selling 5G until 2020. Though, just because the U.S. debuts 5G first doesn’t necessarily mean the country will have widespread coverage. Preucil said, “China expects to have national coverage by 2023, the rollout in the U.S. will probably be slower because there’s a lot more infrastructure that needs to be built out.”

What Else Is at Stake in the 5G Race?

Europe led the charge with 2G and 3G networks, then the U.S. took the lead with 4G. “America’s 4G leadership lead to roughly 125 billion in revenue for U.S. companies that could have gone elsewhere had the companies not been at the technology’s forefront,” Preucil said.

The 5G race only intensifies from here. Preucil believes “China is investing to grow their economy like any other nation and one way to do that from a global competitive standpoint is to invest in these cutting-edge technologies and to make themselves more competitive.”

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