Recently, the GSMA released the "China Mobile Economy Development 2024" report, which cites the key data of the current mobile market and comprehensively analyzes the impact of hot topics such as 5G-A, network API, and generative AI on the development of 5G in the current mobile market, which is of great reference significance for understanding and predicting China's future 5G development.
The report shows that China's 5G market is maturing, bringing wider connectivity and greater economic value. Thanks to rapid network deployment and mature device ecosystems, 5G penetration is growing faster than expected. At present, the number of 5G mobile connections in China has exceeded 800 million, and China's future 5G development potential is unlimited.
01
Key data provides an overview of China's 5G development
At present, China's 5G has been in commercial use for 5 years, and as of the end of February, the total number of 5G base stations in the country has reached 3.509 million. When it comes to 5G development, the GSMA believes that the development process of 5G can be divided into a number of different stages. The initial phase is to improve the connectivity aspects of the foundation, including wide area coverage, capacity, and solution reliability. With the number of 5G connections in China surpassing 800 million by the end of 2023 (45% of total connections), mobile operators are poised to enter the next phase of the technology's development and invest in 5G-Advanced, which will drive the industry to focus on new growth opportunities and economic benefits from enhanced 5G capabilities.
By the end of 2024, more than half of China's mobile connections will be 5G connections. 5G adoption in China continues to rise as major operators gradually shut down legacy networks (2G and 3G) and expand 5G services to more regions. By the end of 2023, Chinese operators had built 3.4 million 5G base stations, accounting for more than 30% of the total number of base stations in China.
The GSMA believes that innovative solutions may be needed to extend 5G coverage to hard-to-reach areas. In May 2023, China's four major mobile operators announced that they would jointly conduct the world's first cross-network 5G roaming trial in Xinjiang. The service allows users to access the 5G network of other carriers if their own carrier does not have 5G coverage. Such initiatives could play a key role in increasing 5G adoption in rural areas.
The number of 5G connections in China is expected to reach 1 billion by the end of 2024. Demand for 5G services in China continues to be strong, with the number of 5G connections reaching 810 million by the end of 2023 (45% of total connections). Macau, China, ranked first with 48% of the total 5G connections, followed by Chinese mainland (45%), Taiwan (37%) and Hong Kong (33%).
Due to the speed of network deployment and the maturity of the device ecosystem, 5G adoption is growing faster than expected. The GSMA predicts that by 2030, China will have more than 1.6 billion 5G connections, accounting for nearly one-third of the global total. By then, China's 5G adoption rate will be close to 90%, making it one of the world's major markets.
By 2030, the number of cellular IoT connections in licensed spectrum in China will reach 4.1 billion, accounting for 70% of the global cellular IoT connections. According to data from the Ministry of Industry and Information Technology, public services, connected vehicles, smart retail, and smart home applications currently account for the largest number of connections.
5G will power China's Internet of Things (IoT) development. At present, a number of operators and equipment manufacturers in China have formulated plans for subsequent development. As a result, progress has been made in 5G LANs, 5G IoT, edge computing, and 5G private networks. There have been reports of 5G-driven Future Railway Mobile Communication Systems (FRMCS) deployed in rail projects, as well as indoor 5G in factories and warehouses, particularly in heavy industry as well as smart cities, public sector and national infrastructure.
In 2030, 5G is expected to bring about $260 billion in benefits to the Chinese economy, accounting for more than 23% of the total impact of the mobile industry on the economy. Most of the benefits will be realized over the next 5 years. By 2030, the economics of 5G technology will level off as it begins to scale up and become widely adopted.
The GSMA expects that 5G will benefit most sectors of the Chinese economy, but some industries will benefit more than others due to their ability to integrate 5G use cases into their respective businesses. It is expected that in the next seven years, 60% of the 5G benefits will come from manufacturing, driven by various applications such as smart factories, smart grids, and IoT-enabled products. Other sectors that will benefit significantly include the financial sector and the information and communication sector, which accounted for 11% and 8% respectively.
02
Five trends provide insight into China's 5G future
As 5G enters a new stage, the industry is actively paying attention to the evolution and development of 5G in the future. In this regard, the GSMA has also predicted the key development trends of the mobile ecosystem in the future.
First, 5G-Advanced and 5G RedCap have become the focus. China continues to lead the way in cutting-edge 5G technology standards. After the completion of 5G standalone (5G SA) deployment, Chinese operators are leading the transition to 5G-Advanced and 5G Lightweight (RedCap) networks. The move will spark a new round of 5G investment in 2024 and beyond, and lay the groundwork for the next wave of 5G use cases that could open up new revenue streams for operators and the broader ecosystem in both the consumer and enterprise segments. Several cities in China are conducting commercial trials for a variety of use cases of 5G RedCap. A number of trials for 5G-Advanced are also underway, laying the foundation for subsequent commercial use.
Second, operators are embracing network APIs to enhance the business value of 5G. Recently, China Mobile, China Telecom and China Unicom released a commercial OTP API (one-time password API) service and passed the GSMA Open Gateway certification, which is the first time that the three operators have jointly launched a commercial API in China since they joined the Open Gateway initiative in June 2023. In addition, CITIC Telecom, Huawei and ZTE are among the latest Chinese companies to join the Open Gateway initiative. In the report, the GSMA noted that open up web APIs will be a key theme in 2024. In the next 12 months, operators will increase their investment and launch more products to the market.
Third, China is at the forefront of the world in introducing new 5G calls. According to the GSMA Intelligence Consumer Focus Survey 2023, two-thirds of the Chinese who have upgraded or plan to upgrade to 5G consider enhanced video calling to be a "very" or "extremely" attractive 5G service. Operators are looking to capture consumer interest by developing new voice and video calling services. An example of this is 5G New Calling (5GNC). 5G New Calling leverages the capabilities of 5G networks and IP Multimedia Subsystems (IMS) to augment basic voice and video calls. This opens up new opportunities for operators to work directly with enterprises to develop new applications that can be called up during calls, enabling the ultra-low latency, superior bandwidth, and reliable quality of service of 5G to be leveraged.
Fourth, Chinese companies are joining the thriving satellite ecosystem. Thanks to the wide area coverage of wireless networks and the mass production and popularization of mobile devices, telecommunication networks are still the main form of connectivity. In recent years, however, technological advances in satellites and other non-terrestrial networks (NTNs) have helped overcome some of the limitations traditionally associated with over-the-air connectivity. Satellite connectivity allows telecom operators to serve new customers in service blind spots, as well as to connect emergency service scenarios as well as existing customers when terrestrial signals are unavailable. The GSMA said several partnerships have been announced to make the most of this opportunity. More partnerships are expected in 2024 as the value becomes clearer and the number of satellites available increases.
Fifth, artificial intelligence lays the foundation for the exploration of new services. Since August 2023, when several companies were allowed to release their large language models (LLMs) to the public, China has entered the fast lane of development in the AI space. Recent developments in the mobile industry show that Chinese operators are not only using AI for internal purposes, but are also exploring new ways to increase revenue. At the same time, with recent advances in mobile chips, cloud computing, and small LLMs, it has become possible to carry generative artificial intelligence (genAI) in smartphones, and smartphones are attracting increasing attention in terms of commercialization of generative AI.
In addition, the GSMA believes that another core driver of 5G growth in China is the rollout of the 6GHz band. In June 2023, China allocated the 6GHz band for IMT, becoming the first country in the world to adopt national legislation to determine relevant regulations. The 6 GHz frequency band is the only high-bandwidth resource in the mid-band and is crucial for the future development of 5G.
In this regard, the GSMA reminds that while new developments are being made in the mobile ecosystem, another priority for the industry will be to work closely with regulators and policymakers to introduce new frequency bands into national legislation in a timely manner to enhance global synergy of spectrum and avoid interference issues. For China, the conditions are in place for the mobile ecosystem to work together to advance the 6GHz band, which will give a strong impetus to the development of 5G-Advanced and help the subsequent technological advancements realize their enormous potential.
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Finishing: Bao Jianyu
Editor-in-charge/layout: Wang Yurong
Reviewer: Wang Tao, Mei Yaxin
Producer: Liu Qicheng
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