Should the US be worried about the 5G gap with China?

Former Google CEO Eric Schmidt and Harvard scholar Graham Allison had a lot to say in a recent Wall Street Journal about the state of 5G in the U.S. In the article, Schmidt and Harvard scholar Graham Allison unceremoniously criticized the various measures the United States has taken in 5G, and criticized the government’s ignorance of restricting Huawei in the development of 5G, but its own development is slow. The actions of the U.S. government have led the former Google executive to conclude that the U.S. is directly behind China in terms of 5G infrastructure.

To be fair, the US isn’t on the leaderboard when it comes to key 5G metrics, although it’s not entirely behind. For example, China’s average 5G download speed is 299Mbps, compared to 94Mbps in the US, according to Speedtest Intelligence’s Q3 2021 ranking. Speedtest said this is partly explained by spectrum, with Verizon and AT&T just beginning to deploy mid-band spectrum for 5G.

Probably the biggest difference is network densification. According to the European 5G Observatory, South Korea leads the world with one 5G base station per 319 people, China has one per 1,531 people, and the United States lags far behind with one per 6,590 people.

Curiously, despite ranking lower on these metrics, the U.S. ranks first for 5G network availability－the amount of time users with 5G-enabled devices spend on 5G networks. In the U.S., it’s 49 percent, while China lags far behind at 20 percent.

Of course, no one can match China’s jaw-dropping 5G subscriber base. China has 355 million 5G subscribers. By comparison, there are about 50 million in the United States. China has deployed 1.4 million 5G base stations, said to account for more than 60% of the global total. There are about 50,000 in the US.

Chinese officials might say this is a successful outcome of a state-driven structure in which resources can be used to meet state requirements and operators are not burdened with spectrum auctions. But this approach also means that China’s telecommunications services are weaker in terms of competition and creativity. For example, China Mobile dominates accounts for more than half of the industry’s revenue and the majority of 5G users.

This shortcoming is particularly pronounced among 5G enterprises that are expected to be the largest source of 5G growth. Chinese operators are demanding a central role, but that’s not necessarily good news for businesses. Operators have developed thousands of bespoke 5G projects but are now finding this is not a viable or scalable business model.

As far as China’s homegrown deployments make it a world leader, there isn’t much of an advantage so far. Internationally, the situation is different, as China’s 5G technological advantages make it an attractive partner for many countries.

5G has become an important part of China’s Digital Silk Road project, which was launched seven years ago at the same time as the Belt and Road Initiative (BRI) to export digital technology to Asia and developing countries, with the larger goal of establishing “a non-US-centric, China-centric Asian and global digital order”.

There is no doubt that China has made progress in these countries by providing hardware and solutions, and providing funding. It is at this point that China’s 5G gap matters.