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Foreign Media Comment: China Will Surpass The US In The Global 5G Competition FROM ZKTEL

- Aug 08, 2018 -

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According to foreign media reports, the latest report from Deloitte has reached the same conclusion as other research companies: China will beat the United States in the global 5G competition.


“China’s five-year economic plan clearly invests $400 billion in investments related to 5G. Therefore, China and other countries may create a 5G tsunami that will prevent other markets from catching up.” Deloitte’s latest “5G: Leading The Ten Years of Opportunity report says this.


Earlier, GSMA Intelligence said: "China is expected to become the world's largest 5G market by 2025, accounting for one-third of the total number of 5G connections worldwide, with a connection of 430 million."


In addition, another market research firm, Mobile Experts, recently said that “the Chinese market will soar”. Joe Madden, principal analyst of the company, said: "For most countries around the world, 5G deployment will take place over many years and slowly solidify over time. China is an exception."


This is very important because the Trump administration has positioned 5G as a national security issue. The role of the United States in the development of 5G is the main reason why the Trump administration prevented Broadcom from ac

China 5G deployment


“The recent MWC Shanghai conference in China shows that China is firmly pushing ahead with its plans for commercial 5G services in 2020,” Wall Street market research firm Jefferies wrote in a report last month. "China Telecom and China Unicom have both clearly defined their plans to build a 5G SA network. China Mobile has not only launched the '5G SA Breakthrough Action' with major equipment manufacturers, but also released '5G terminal product guidelines with detailed specifications and procurement schedules. ', thus playing a leading role."


Jefferies analysts also speculate that the Chinese government is promoting a major merger or joint venture between China Telecom and China Unicom, which may make China move to 5G technology more quickly and efficiently. In 2014, the Chinese government established China Tower by integrating the tower resources of three telecom operators, and has now listed IPOs in Hong Kong.


“They have too many state-owned companies,” explains Mobile Experts' Madden, adding that the Chinese government has been working hard to reduce the number of state-owned companies in other sectors to two. "This is a very confusing situation. What they want to do is reduce the number of (wireless carriers). On the surface, they seem to compete with each other, but in reality they don't."


However, Madden pointed out that if Chinese telecom operators want to make major mergers and launch 5Gs in the next two years, then there is not much time left for China.


It is worth noting that the Trump administration’s ban on ZTE may bring additional impetus to the positive development of China’s 5G. "The US government's short but effective ban on ZTE has indeed brought panic to the Chinese market. Chinese officials are now increasingly aware of their dependence on the US economy and suppliers," Madden said.


Madden said that China may move to 5G in a more unified and controllable manner, which may lead to heavy dependence on Chinese suppliers such as Huawei and ZTE.


In fact, non-Chinese equipment manufacturers such as Ericsson and Nokia, which are targeting China's 5G opportunities, may face uncertainty. “Although there are definitely opportunities in China, we are cautiously investing in this market,” Nokia CEO Rajeev Suri said at the company’s recent quarterly earnings meeting. “We value our customer relationships in the Chinese market and are impressed by the speed and scale of this market shifting to new technologies. At the same time, we believe that sales in China may dilute profit margins. If so, you can look forward to it. We continue to gain market share in China, but we will participate in a focused and very prudent manner."


US market status


Given the sheer size of China's 5G opportunities, this caution is noteworthy. According to the Deloitte report, China Tower has 1.9 million wireless base stations in China, compared with 200,000 in the United States. Last year, China’s iron tower added 460 base stations every day. “In the past three years, the number of base stations added by US tower companies and operators has increased less than the number of Chinese towers in three months.”


The Deloitte report said: "Our conclusion is that since 2015, the United States spends between $8 billion and $10 billion less on wireless infrastructure than China."


It needs to be clear that the Deloitte report is very consistent with the political strategy of the US wireless industry. The report states that "reducing the cost and deployment cycle time of small cells will help eliminate the major barriers to network densification and enable operators to add much-needed low-cost capacity to our nation's wireless networks." The statement is almost identical to the contents of the FCC document.


Nevertheless, the conclusions of the Deloitte report on China's 5G development should not be ignored, especially since this conclusion is quite consistent with the findings of research companies such as GSMA Intelligence, Mobile Experts and Jefferies. In addition, Huawei and ZTE are major equipment suppliers in the global market. Among them, Huawei is the world's largest supplier of mobile network equipment, and even the company does not have much market participation in the United States, and in the last quarter the company has surpassed Apple to become the world's second largest smartphone supplier. China Mobile is the world's largest mobile network operator with more than 900 million users, which is three times the US population.


Therefore, it is clear that regardless of the timetable, any move by China to the development of 5G technology will be enormous. And, if you look at early signs, you will find that China's early deployment of 5G is likely to start soon, and these actions will be very large and important. Iquiring Qualcomm. "If you give 5G the dominant position to China, this will have a major negative impact on US national security," the US Foreign Investment Committee wrote in a document.


But what actions does China have in terms of 5G? At least until now, the voice of the Oriental market is relatively quiet.


Specifically, China has not allocated a 5G spectrum license. China's three major telecom operators - China Mobile, China Unicom and China Telecom - have not yet announced their infrastructure suppliers.


However, these conditions may change soon.


China 5G deployment


“The recent MWC Shanghai conference in China shows that China is firmly pushing ahead with its plans for commercial 5G services in 2020,” Wall Street market research firm Jefferies wrote in a report last month. "China Telecom and China Unicom have both clearly defined their plans to build a 5G SA network. China Mobile has not only launched the '5G SA Breakthrough Action' with major equipment manufacturers, but also released '5G terminal product guidelines with detailed specifications and procurement schedules. ', thus playing a leading role."


Jefferies analysts also speculate that the Chinese government is promoting a major merger or joint venture between China Telecom and China Unicom, which may make China move to 5G technology more quickly and efficiently. In 2014, the Chinese government established China Tower by integrating the tower resources of three telecom operators, and has now listed IPOs in Hong Kong.


“They have too many state-owned companies,” explains Mobile Experts' Madden, adding that the Chinese government has been working hard to reduce the number of state-owned companies in other sectors to two. "This is a very confusing situation. What they want to do is reduce the number of (wireless carriers). On the surface, they seem to compete with each other, but in reality they don't."


However, Madden pointed out that if Chinese telecom operators want to make major mergers and launch 5Gs in the next two years, then there is not much time left for China.


It is worth noting that the Trump administration’s ban on ZTE may bring additional impetus to the positive development of China’s 5G. "The US government's short but effective ban on ZTE has indeed brought panic to the Chinese market. Chinese officials are now increasingly aware of their dependence on the US economy and suppliers," Madden said.


Madden said that China may move to 5G in a more unified and controllable manner, which may lead to heavy dependence on Chinese suppliers such as Huawei and ZTE.


In fact, non-Chinese equipment manufacturers such as Ericsson and Nokia, which are targeting China's 5G opportunities, may face uncertainty. “Although there are definitely opportunities in China, we are cautiously investing in this market,” Nokia CEO Rajeev Suri said at the company’s recent quarterly earnings meeting. “We value our customer relationships in the Chinese market and are impressed by the speed and scale of this market shifting to new technologies. At the same time, we believe that sales in China may dilute profit margins. If so, you can look forward to it. We continue to gain market share in China, but we will participate in a focused and very prudent manner."


US market status


Given the sheer size of China's 5G opportunities, this caution is noteworthy. According to the Deloitte report, China Tower has 1.9 million wireless base stations in China, compared with 200,000 in the United States. Last year, China’s iron tower added 460 base stations every day. “In the past three years, the number of base stations added by US tower companies and operators has increased less than the number of Chinese towers in three months.”


The Deloitte report said: "Our conclusion is that since 2015, the United States spends between $8 billion and $10 billion less on wireless infrastructure than China."


It needs to be clear that the Deloitte report is very consistent with the political strategy of the US wireless industry. The report states that "reducing the cost and deployment cycle time of small cells will help eliminate the major barriers to network densification and enable operators to add much-needed low-cost capacity to our nation's wireless networks." The statement is almost identical to the contents of the FCC document.


Nevertheless, the conclusions of the Deloitte report on China's 5G development should not be ignored, especially since this conclusion is quite consistent with the findings of research companies such as GSMA Intelligence, Mobile Experts and Jefferies. In addition, Huawei and ZTE are major equipment suppliers in the global market. Among them, Huawei is the world's largest supplier of mobile network equipment, and even the company does not have much market participation in the United States, and in the last quarter the company has surpassed Apple to become the world's second largest smartphone supplier. China Mobile is the world's largest mobile network operator with more than 900 million users, which is three times the US population.


Therefore, it is clear that regardless of the timetable, any move by China to the development of 5G technology will be enormous. And, if you look at early signs, you will find that China's early deployment of 5G is likely to start soon, and these actions will be very large and important.


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