Analysts at Deloitte conclude it would be “near impossible” for the United States to catch up with China in 5G given a substantial investment gap and much faster deployment in China.
Deloitte found that since 2015 China has outspent the United States by roughly $24 billion on 5G-related infrastructure and has more than ten times as many sites ready to support 5G. In fact, during the first three months of 2017 China added more 5G sites than the US did over the subsequent three years.
“China and other countries may be creating a 5G tsunami, making it near impossible to catch up,” the Deloitte report warns.
Part of the reason is cost: deployment in China can be about 35 percent cheaper than in the US, according to Deloitte’s analysis. The firm recommends the United States adopt lighter-touch policy frameworks to shorten deployment times and make projects more attractive to private investors.
The negative consequences could take decades to overcome
Leadership in 5G promises significant economic and societal returns. Beyond dramatically higher mobile speeds that enable new user experiences such as real-time virtual reality, 5G is critical infrastructure for smarter cities, autonomous vehicles, remote healthcare and many other innovations.
Deloitte says the countries that first adopt 5G technologies are likely to enjoy “disproportionate gains,” unlocking an era of untapped economic potential.
To illustrate the scale, IHS Markit recently predicted that 5G could generate $12.3 trillion of global economic output by 2035.
Some analysts argue Chinese 5G capabilities are already at least a year ahead of Western competitors. Vendors such as Huawei are frequently cited for their expertise in areas like Massive MIMO, a key technology for increasing network capacity.
China and other countries may be creating a 5G tsunami
There is also debate about the effects of restrictions on Chinese equipment. Some governments have limited or banned use of Chinese vendors in critical telecommunications infrastructure for national security reasons and to reduce funding for those suppliers.
But Deloitte cautions this approach could be counterproductive. Excluding Chinese technology may slow deployment and produce networks that are less efficient or more expensive to build, potentially widening the leadership gap rather than closing it.
“Unless tangible steps are taken to help rebalance the private investment case for the upgrade with the demonstrated external benefits to other industries and the public good, the United States may risk losing the leadership it gained in the previous era,” Deloitte wrote.
“The negative consequences could take decades to overcome, and other countries are already making their moves.”
Read more: China is going to set the pace for 5G network deployments
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