The Greater Bay Area’s two dominant mobile-equipment manufacturers, who also happen to be China’s biggest, and the world’s biggest, are at a crossroads in their development, to put it mildly. The SCMP asks the question on everyone’s minds today, with an article that explores what will likely happen to them in the next stage of China’s 5G rollout. Will they be able to push the country past its Western rivals as China prepares to roll out commercial 5G services via the three big telcos? Or will they lose market share to Nokia and Ericsson?
In our minds, it’s a no-brainer. The idea that Beijing would to turn to Swedes and Finns, and hand them the keys to 1.2 billion existing smartphone subscribers, let alone the billions of new devices that will be internet-enabled with 5G in China, is laughable. Before the Huawei ban, they might have stood a chance to keep a sliver of their existing market share. Now? Forget it. The bifurcation of the technology universe is likely well under way. And Huawei and ZTE are sitting in the bigger – exponentially bigger – side of it.
The real question, as the article allows, is how long China’s 5G rollout will be delayed by the US ban on Huawei getting supplies from US companies. That question was emphatically answered today by the leak from Shanghai that 5G commercial licenses will be awarded this week. However, the details are still unclear as to how fast and how wide the rollout will be.
The question for us down here on China’s southern tip is where we fit in. Our prediction is that Shenzhen and Guangzhou will lead the way for China Mobile, China Telecom, and China Unicom, making use of Huawei and ZTE equipment that rolled off production lines months ago. The rest of the Greater Bay Area will be pulled along quickly, as this is where the country’s deepest consumer markets are concentrated. By the end of next year, our region will likely have more than 90 million people and an untold number of new devices hooked up and generating data in ways currently unimaginable – at least, unimaginable in western societies that don’t have such crazed digital citizens as we do here.
Shanghai will want to keep up, and perhaps Beijing, too. But the GBA is where the action will be. If there is any delay in nationwide 5G rollout, it won’t likely be felt here.
What wider commercial potential will be unlocked for the GBA as this technology upgrade happens? That remains to be seen. We are on the side of the futuristic-optimists: far from being a time of troubles amid the deteriorating US-China relationship, we see the GBA entering a “2.0” phase of its economic development from 2020. Stay tuned.