World

China issues 5G licences amid Huawei setback

SHANGHAI/HONG KONG : China granted 5G licences to the country's three major telecom operators and China Broadcasting Network (CBN) yesterday, giving the go-ahead for full commercial deployment of the next-generation cellular network technology.

The approvals will trigger investment in the telecom sector, which will benefit top vendors such as Huawei Technologies, just as the Chinese network equipment provider struggles to overcome a US blacklisting that has hurt its global business.

State-owned carriers China Mobile, China Unicom and China Telcom, as well as state-owned broadcaster CBN, are the four licensees named by the government.

The three carriers had been granted trial 5G licences at the end of last year, and yesterday's announcement gives the go-ahead to begin commercial deployment ahead of the original timeline targeting that for 2020.

The accelerated 5G roll-out could help Huawei as Washington pushes its allies to drop it from their 5G networks due to fears that it could be used as a tool of Chinese state espionage, a claim Huawei has denied.

Huawei said in response to the licence grant that it was prepared to support China's 5G growth. It said it had signed 46 5G commercial contracts in 30 countries to date, shipping more than 100,000 5G base stations.

Some analysts however believe China's 5G roll-out will face difficulties due to the US ban on Huawei buying parts and components from US companies without Washington's approval.

"We remain concerned that if the US export ban on Huawei remains in place for some time, and is even extended to other Chinese tech companies, it will be very difficult for China to build 5G in scale," Jefferies said in a note. "The action by China to accelerate 5G licensing does not remove or alleviate this risk."

Telecom operators in Britain, the US and South Korea have already started offering 5G services in limited areas.- REUTERS

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