Briefing: China issues 5G commercial licenses, Huawei says it's ready

China issues 5G licences as race to build networks heats up

The market originally anticipated that the government would grant the 5G licenses near the end of this year, or in October at the earliest. It will also push the three major telecom carriers to accelerate their 5G network rollout plans.

The Minister for Industry and Information Technology spoke at the ceremony that China "will continue to welcome overseas enterprises to participate in the rollout of China's 5G networks".

Another Chinese cellphone maker, Vivo Communication Technology Co (維沃), said their 5G mobile phones are ready for network testing and will be on sale once trials are complete.

Today, the Ministry of Industry and Information Technology issued 5G commercial licenses to China Telecom, China Mobile, China Unicom, and China Radio and Television.

Shanghai has developed what it claims to be the first district boasting both 5G coverage and a broadband gigabit network, state-run China Daily reported. "Granting four 5G licenses is conducive to fostering rational competition and investment in the market".

Why it's important: China planned to commercialize the 5G in 2020, while the latest move makes a statement that China's 5G won't be delayed because of the U.S. trade ban on Huawei.

More news: Fiat Chrysler withdraws from proposed merger with Renault

The license grant comes just after Huawei Technologies Co Ltd, China's largest network equipment maker, was slapped with restrictions from Washington that prevent US -based companies from supplying products to it. In markets like the United States, operators often only focus construction on urban areas where profits can be more easily made.

Huawei will get a huge boost from China's 5G expansion as it will get to sell its 5G equipment to carriers. The Ministry of Industry and Information Technology (MIIT) also adds that foreign companies are welcomed to partake in the development of the country's 5G industry.

Huawei has become a central part of a US-China power struggle which started out in trade, and is now being played out in the technology sector. That could create serious problems for Huawei as it works to obtain components from USA suppliers for its 5G equipment.

Analysts attribute China's fast progress in 5G technology to Chinese firms' heavy R&D spending, the country's increasingly sound mobile communications industrial chain and an expanding market.

China was a pioneer in conducting 5G technology research and development (R&D) and has been accelerating the R&D and industrialization of 5G equipment in recent years.

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