Arthur J. Villasanta – Fourth Estate Contributor
Beijing, China (4E) – Two of China’s largest mobile phone firms, China Telecom Corporation, Ltd. (CT) and China United Network Communications Group Co., Ltd. (China Unicom), will be merged into one mega-carrier to challenge U.S. firms in the world market for 5G technology.
The State Council, China’s chief administrative authority under by premier Li Keqiang, is said to be seriously in favor of a proposal to combine CT and China Unicom, both of which are state-owned enterprises (SOEs). The merger is apparently being driven by the need to have one mammoth firm aggressively lead the development of 5G in China. The resulting economies of scale should result in better products and higher efficiencies.
Some observers believe the planned merger is also being driven by the intense competition from the United States and the worsening trade war between the U.S. and China, which will weaken China’s economic growth.
China’s new mega-carrier, however, will have its work cut out for it. The United States is pulling-out all the stops to ensure it leads the world in deploying 5G. The U.S. Federal Communications Commission claims that U.S. 5G technology will be 100 times faster than 4G.
The four major U.S. carriers have all announced 5G deployments. Verizon’s 5G fixed wireless will launch in four U.S. cities; AT&T will begin its millimeter wave commercial deployments this year; Sprint will launch in the 2.5 GHz band while T-Mobile’s 600 MHz 5G launch will take place in 30 cities.
5G is a next-generation high-speed wireless technology whose speeds are up to 100 times faster than the existing 4G service. The U.S. is the world leader in 5G technologies.
CT and China Unicom account for 19 percent and 20 percent, respectively, of the 1.49 billion mobile phone users in China. China Mobile, the only other mobile service provider, dominates with a 61 percent market share. Consolidation will leave only two firms: CT/China Unicom and China Mobile, which also an SOE.
CT/China Unicom and China Mobile will be allocated different spectrum so as to allow both firms to aggressively develop 5G technology. Sources said CT/China Unicom and China Mobile will receive 100MHz of contiguous spectrum at 3.5GHz; 100MHz of contiguous spectrum at 4.9GHz and 50MHz of contiguous spectrum at 3.3GHz for indoor coverage.
Government regulators might also allocate 60MHz of contiguous spectrum at 2.6GHz to CT/China Unicom and 40MHz to China Mobile. The 40MHz will allow China Mobile to combine this with its existing 4G spectrum of 60MHz. China Mobile will, therefore, have 100MHz spectrum at 2.6GHz to deploy, which is far larger than the 60MHz allocated to CT/China Unicom.
Article – All Rights Reserved.
Provided by FeedSyndicate