The commercialization of 5G technology is on the way, with investment return concerns and core components as two major constraints on progress, 21jingji.com reported on Friday.
Test results of the third phase of China's 5G technology research and development are scheduled to be released on Sept 28, indicating a completion of a series of tests directed by the Ministry of Industry and Information Technology since January 2016.
On the basis of the results three major telecommunications operators, including China Mobile, China Telecom and China Unicom, will start to build scaled experiment networks.
The three operators will also make their own technology plans and try to find new profit points before 5G technology reaches full commercialization by 2020.
China Mobile plans to build over 100 5G base stations in Shanghai, Hangzhou, Guangzhou, Suzhou and Wuhan to verify key functions and performance in 2018 and start 5G application in nine areas including drones, long-distance medical treatments and robots in 2019.
The leading telecommunications operator will also build 5G service demonstration networks in 12 additional cities between 2018 and 2020.
Getting a return on investment is a challenge to developing 5G, fifth-generation communication technology. The new network is expected to be 10 times faster than 4G and will support superfast movie downloads, self-driving cars and the streaming of virtual reality games.
The investment in 5G technology will be at least 1.5 times that of 4G technology, and is expected to surpass 1.2 trillion yuan (174 billion U.S. dollars), said Wei Leping, deputy director of communications science at MIIT's technology commission.
Network maintenance costs will increase substantially, as power dissipation of 5G technology will be over 5 times that of 4G, Wei said.
Operators are concerned about return on investment in 5G technology, which is a global bottleneck for the industry.
Building core components, especially self-developed chips, is another challenge for China's 5G technology development.
"In the 3G era, Huawei and ZTE joined the world's top 5 telecommunications equipment suppliers. In the 4G era, four mobile brands including Huawei, Xiaomi, Vivo and OPPO became world-famous. Now, China's 5G market will lead the domestic chip and device industry to break through the low-end market and take a firm foothold in the high-end market," industry insiders said.
The number of 5G users is predicted to reach 4 million in China by 2020 and increase to 428 million by 2025, according to the China Academy of Information and Communications Technology.
The emerging 5G mobile communications technology is expected to generate 3.5 trillion U.S. dollars of output and 22 million jobs in the global telecom industry by 2035, according to a Qualcomm report.