As trade tensions between China and the United States escalated on Friday, the products from soybeans to cars could all be affected, but the key technology of 5G could actually be one of the reasons for a trade war between the largest economies in the world.
5G technology is the next generation of mobile Internet. It allows people to download movies in a few seconds and bring a good mobile Internet experience. However, 5G is far more than fast moving the Internet. In the eyes of the industry, 5G is an advanced technology that can support the next generation of infrastructure, which will support the billions of Internet devices, smart cities and unmanned vehicles that will be launched in the next few years.
5G technology may be the key to the commitment of US President Donald Trump (DonaldTrump) to make the United States great again and the key to Chinas ambition to become a world leader in artificial intelligence in 2030.
The mobile Internet needs to reach a consistent standard around the world, so that companies that make telecommunications equipment and mobile operators can spread the technology around the world. 5G technical specifications reached agreement in December last year.
But as European companies such as ZTE, HUAWEI (Huawei) and other European companies such as NOKIA (Nokia) and Ericsson (Ericsson) invest more in the field of 5G, real competition is under way. American chip manufacturers and operators such as Qualcomm and Intel are also involved. Declan Ganley, chief executive of communications company RivadaNetworks, said DeclanGanley is also part of the trade war.
The key to the problem is who defines and controls the model, architecture and agenda of 5G, he said in an interview with CNBC earlier last week. The importance of this is that 5G is a deep blue ocean in the network.
So this is an important strategic game. It is more important than route. Controlling 5G technology means controlling airspace. It is one of the most important areas, which is related to the ultimate development goals.
Its economic value is trillions of dollars. According to IHSMarkits data, it is estimated that by 2035, 5Gs global economic output will reach US $12 trillion and 300 billion.
The United States needs to turn the table
For Gan Li, the current model of how to allocate radio frequencies to mobile operators has been broken. At present, the United States Telecom is bidding the so-called radio spectrum through the auction procedure organized by the Federal Communications Commission (FCC). In other countries, appropriate regulators also control spectrum auctions. This usually leads to big players who have more capital to dominate the market.
The chief executive said that this had stifled innovation, especially those European companies that led the first generation of mobile technology.
Because of the distribution of the radio spectrum, we have rebuilt a top-down model, which is now an absolutely crucial part of our economy, Gomi said.
He added that in the auction mode, American companies compete with each other in order to win customers, which will affect their profits and influence the ability of investment innovation. In China, however, only two or three major state-owned network operators occupy a dominant position in the market. With the support of the Chinese government, they can continue to carry on a lot of business and investment, which is conducive to the improvement of innovation and lead them to us Telecom, which may be difficult to compete with when it comes out with the 5G.
Gan Li said that although many European and American telecom companies may die, China can support its domestic enterprises. Thats why he and his company, RivadaNetworks, advocate the wholesale mode of spectrum allocation, similar to the way electricity markets operate.
Theoretically, this model allows more participants to compete for spectrum when meeting their needs, which will lead to more dynamic pricing of radio spectrum.
What we need to do is completely turn over the existing mode, Gan Li said, adding that this will make the US ahead of China in 5G.
Interestingly, the Trump administration hinted at this policy. KelseyGuyselman, a policy adviser to the White Houses office of science and technology policy, said in a recent event that the government recognizes that the shared spectrum may be a way to launch the next generation of mobile networks, suggesting wholesale patterns.
Gan Li said that competition for 5G is rapidly increasing, and that the United States needs to introduce wholesale mode quickly, otherwise it may lose to China.
We are still 13 months away from the real failure, gill told CNBC.
However, not all experts believe that the wholesale spectrum model can achieve the desired effect of the United States.
I think that although this is a good idea, whether the jury will achieve its stated goals is still open to question. And many of the main companies are competing in 5G competition to find 5G businesses that are truly profitable. Sean Collins, chief executive of technology, media and Telecommunications analysis firm CCSInsight, told CNBC by phone earlier this week.
What is China doing?
Even the closest allies in the United States have realized the threat posed by China in the field of technology. Boris John, British foreign minister, said in a recent event that Chinas technology companies may surpass the United States BorisJohnson.
The Chinese are going to win. Theyve got 5G. They have found a way out. Everyone will play with their own gadgets through the Chinese system rather than the US system, Johnson said.
Although the US has been fighting back China, China, the worlds second largest economy, has been hoping to deploy more business in 5G. HUAWEI has been lobbying Australian politicians. According to the financial times, the Chinese giant is the largest corporate sponsor of the Australian legislature. On Thursday, Portuguese branch of telecom company Altice launched a 5G network with HUAWEI.
In addition, Jo Madden, chief executive of MobileExpertsLLC, a market research firm, pointed out that China is preparing to increase the deployment of 5G. (JoeMadden) Madden wrote in industry publication FierceWireless that China Internet company began to increase the ordering of key parts.
In particular, we have learned from at least 10 different suppliers that the 5G deployment in China is now expected to start in early 2019, rather than as originally planned in July 2019. Moreover, by the end of 2019, these figures may become enormous. The number of 5G base stations deployed in December is enough to cover the size of German size, Madden said.
According to the United Nations World Intellectual Property Organization (WIPO) data, Chinese companies patent applications increased by 13.4% over the same period, while American companies patent applications increased by only 0.1% over the same period. HUAWEI and ZTE are two of the largest patent applications in the world, and this highlights the fact that Chinas technology giants are building a huge intellectual property pool.
Who will laugh at the end
Against this background, it is not surprising that some large Chinese mobile and telecom companies are being suppressed by the United States. Earlier this year, the head of the US intelligence department warned Americans not to buy HUAWEI made smartphones. ZTE is prohibited from using parts produced by US companies. On Monday, the US government blocked China Mobiles services to the US market on the grounds of national security.
Telecommunications and 5G are regarded as important national security priorities for the White House. Who wins and who loses? In this case, this is trillions of dollars. China has been strengthening its 5G deployment. And the Trump administration says China is pushing for more equitable economic treatment, which can also be seen as more space and time to gain more advantages in the telecommunications industry. After all, 5G is obviously more important than ever before. But will there be a winner in the telecommunications competition? Europe, the United States and China have successfully coexisted in 4G, and for some people, the concept of winning in 5G may not be so clear. This is the race we are paying close attention to. I really dont know who is going to win. Collins pointed out. Source: NetEase science and technology report editor: Wang Fengzhi _NT2541
Telecommunications and 5G are regarded as important national security priorities for the White House.
Who wins and who loses? In this case, this is trillions of dollars. China has been strengthening its 5G deployment. And the Trump administration says China is pushing for more equitable economic treatment, which can also be seen as more space and time to gain more advantages in the telecommunications industry. After all, 5G is obviously more important than ever before.
But will there be a winner in the telecommunications competition? Europe, the United States and China have successfully coexisted in 4G, and for some people, the concept of winning in 5G may not be so clear.
This is the race we are paying close attention to. I really dont know who is going to win. Collins pointed out.