United States falling behind China in race to 5G wireless - Deloitte report

Donna Miller
August 10, 2018

As a result of all this, the USA risks ceding its tech leadership position to China, Deloitte concludes - particularly because of the disproportionate economic benefits that come with early tech adoption.

China is significantly outpacing the U.S. in terms of spending on the infrastructure necessary to ensure 5G readiness, according to a new study by Deloitte.

Despite the global technology clout that the U.S. has the potential to lose if bested by China, it could also miss out on potential economic benefits that come with adding billions of devices to a 5G network, according to a press release.

As both countries prepare for the next generation of super-fast wireless networks, China has built about 350,000 cell sites since 2015, while the United States has built fewer than 30,000, according to a study released Tuesday by Deloitte.

Dan Littmann, a principal at Deloitte, said in a statement that "for the USA to remain competitive and eventually emerge as a leader, the race to 5G should be carefully evaluated and swift actions should be taken".

5G is expected to enable $12.3 trillion of global economic output in 2035, IHS Markit estimated in a recent report.

The report notes it may also be about 35 percent cheaper to install equipment necessary to add carriers to 5G in China as compared to the United States. "However, customers' ability to access more and more data for the same or lower price is a potential boon to other industries and the national economy".

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The country's five-year economic plan, which runs through 2020, calls for spending $400 billion on 5G investment, it pointed out.

Deloitte noted that adoption of 5G technology in the communications infrastructure is becoming increasingly critical.

"China and other countries may be creating a 5G tsunami, making it near impossible to catch up", Deloitte said in its report. In just three months of 2017, according to a Reuters report, China had built more cell tower companies and carriers than the USA had in the three previous years. China now has approximately 1.9 wireless million sites, Deloitte says - 10 times more than the US.

Deloitte estimated that the equipment necessary to add a carrier in China cost about 35 percent less than the U.S., suggesting that Washington would need to spend 2.67 times the amount that China does to generate an equivalent amount of wireless network capacity. On a per capita basis, the United States' tower density lags China by approximately three times.

There are now 14.1 cell sites per 10,000 people in China, and 5.3 sites per 10 square miles.

Deloitte concluded, "The United States led the world in 4G and in the process created thousands of jobs".

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