China issues 5G licenses

China issued 5G licenses on Thursday, beginning commercial use of next-generation telecommunications technology and offering 20 to 50 times faster mobile Internet access, igniting a trillion-yuan market.

The Ministry of Industry and Information Technology granted licenses to the top three telecom carriers and the national broadcaster — China Mobile, China Telecom, China Unicom and the China Broadcasting Network. China Mobile hopes to start services in 40 cities by September.

The technology will bring new opportunities in the digital economy, accelerating the transformation of many industries, and driving sectors such as the Internet of Things and smart driving, MIIT Minister Miao Wei said at the license presentation ceremony.

China holds about 30 percent of 5G technology patents and the announcement brings huge opportunities for firms like Huawei and ZTE. Overseas firms like Ericsson, Intel, Nokia and Qualcomm also share China’s achievements through research and testing, said the MIIT.

5G will create jobs and opportunities for enterprises, besides bringing faster Internet access for consumers, said industry association GSMA, which represents 750 mobile operators around the world.

“It’s not in any doubt that China will be the world’s biggest 5G market,” said Joe Guan, GSMA China’s head of policy. “It not only brings benefits for consumers, but for enterprises and the whole economy.”

But consumers need to be patient. Mobile carriers must still build more base stations and draft price packages. The good news is that SIM cards and numbers can be the same during switch from 4G to 5G, though a new phone will be required.

Huawei, Lenovo, OnePlus, Oppo, Samsung, Vivo and Xiaomi have already launched models, but not so Apple. Many are aimed at the overseas market.

Most Android 5G models cost between 8,000 yuan（US$1,156) to 12,000 yuan, double or triple the price of 4G flagship models and are not affordable for most users.

Prices are expected to fall to around 5,000 yuan in six months and to drop to about 1,000 - 2,000 yuan by the end of next year. China Mobile plans to offer more than 30 5G models by this year and has established a fund of 30 billion yuan to boost 5G applications.

Shanghai Mobile has started selecting people to participate in 5G trials. Invited users get a free phone, SIM card and mobile data allowance.

Huawei has invested over US$2 billion in 5G over 10 years and is “fully prepared,” having conducted 5G tests in over 40 cities nationwide and obtained 46 contracts in 30 countries.

The technology is expected to generate 10.6 trillion yuan of economic output and create over 3 million jobs between 2020 and 2025, according to the China Academy of Information and Communications Technology.