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World’s telecommunications giants battle for a tech standard worth billions

(Global Times)    09:42, July 22, 2016

The era of 5th generation wireless is on the way. The biggest names in telecommunications, as well as their home countries, are investing heavily in 5G to ensure they have the biggest voice in setting the still-unformulated technological standard. The winners will reap billions of dollars in patent fees as well as a dominant position in the market for their own 5G technologies. China is well-positioned to have a greater voice this time thanks to its huge investment in telecommunications enterprises and their advanced technology.

 

The US has made substantial inroads into 5th generation mobile networks or 5th generation wireless systems (5G).

US President Barack Obama announced on July 14 that the US government will grant $400 million to support the Advanced Wireless Research Initiative, according to the White House website.

The website described some of the technology's potential benefits for mobile users, such as downloading full-length, high-definition movies in five seconds - 100 times faster than on a 4G connection.

It also told of how the technology could provide first responders and emergency room doctors with real-time videos and sensor data from police vehicles, including patient vitals and medical records, well before the patient arrives at the hospital.

"There can be little doubt that the US's big budget is meant to help the country control the next generation of mobile technology," said Wang Yanhui, secretary-general of the Mobile China Alliance.

US Federal Communications Commission (FCC) Chairman Tom Wheeler said as much at a congressional subcommittee hearing on Tuesday, according to a report in the newspaper USA Today.

"5G can put this country, its manufacturers, its entrepreneurs and innovators on … a home-field advantage," he said.

The US shares this ambition with just about every other country - China included - with a high-powered telecommunications sector. Setting a 5G standard is about a lot more than just coming up with a set of criteria for a new technology. It's also about money.

Those with a bigger say in formulating the international standard for 5G will reap quite a few benefits, Wang said.

"The standard is made up of numerous patents," he said. "Enterprises with a voice can collect a large number of patent fees. In addition, they can obtain greater market share due to their advanced technology and early entry into the market."

"Along with the patent fees, the companies who influence the standard can earn profits by selling their products," said Chen Wei, a senior consultant at the Beijing-based investment consultancy China Venture.

The promise of 5G

The world's major powers and major global communications companies have all been working on 5G technologies in recent years. The standard promises big things for users.

So far, most of the public attention has focused on 5G's speed. And rightly so. 5G will provide users with data transfer speeds that are 10 to 100 times faster than 4G, according to the FCC.

However, the technology's ability to connect with all manner of devices might be far more important, Wang said.

"4G mainly applies to mobile communications, but the application of 5G will be far broader. It will expand mobile data connections to cars and the Internet of Things," he told the Global Times on Tuesday.

There is a huge market for the Internet of Things, China Mobile Vice President Li Huidi said on June 29 at an industry summit in Shanghai.

By the end of 2020, there will be 50 billion devices connected to the Internet around the world, 10 billion of which will be in China, Li noted.

Everyone wants a say

There has been a lot of hype about 5G, but there is still no international standard for the emerging technology, though the big players are working on it.

Consequently, the argument has intensified of late about who will get how much of a say in the technology's formulation.

Some think that countries and companies with a bigger say in formulating the standard will become the dominant players in the 5G era.

Consider Qualcomm Inc. The telecommunications giant owns a number of core patents for 3G and 4G mobile technologies. Any company that wants to use the standard has to either buy Qualcommm's equipment or pay it licensing fees for its patents.

China Mobile experienced this first-hand.

"It is estimated that in 2014 China Mobile would pay at least 5 billion yuan in additional patent fees to Qualcomm for using Qualcomm's 3G patent technology in its TD-LTE terminal equipment," the Chinese telecom's former chairman was quoted as saying by the National Business Daily in July 2014.

Japanese companies are also in on the act. The telecom giant NTT DOCOMO Inc long ago began researching 5G and has already started testing its technology, aiming to become a leader in creating the 5G standard.

China has also taken numerous steps in advancing its own ambitions in this area. In February 2013, the Chinese government established a team to advance research into 5G.

The government has released five white papers about its vision for 5G and its framework for the technology.

Furthermore, China officially started testing its 5G technology in January.

The world's telecom heavyweights are well on their way toward creating their own 5G technology. US-based AT&T Inc and Verizon Communications Inc have both begun 5G testing.

France's Alcatel-Lucent has been making large-scale investments in 5G since 2010, and its research and development (R&D) arm has participated in nearly all 5G development projects organized by the EU.

South Korea-based Samsung and Sweden-based Ericsson have also dipped their toes into 5G R&D.

China's efforts

The situation is similar in China. "All major telecom operators and telecommunications equipment manufacturers will join the competition to formulate the 5G standard," Wang said.

China Mobile announced on June 29 that it is working to realize commercial uses of 5G by the end of 2020.

China's telecommunications equipment makers ZTE Corp and Datang Telecom Technology have each issued white papers on 5G.

In the past, Western companies have controlled the formulation of the 2G, 3G and 4G technology standards, but experts said China has an opportunity to break the trend in the era of 5G.

"China is expected to have a much greater voice in formulating the international standards for 5G," Wang said.

Chen, the senior consultant, noted that because China's telecom operators, such as China Mobile, China Unicom, China Telecom, and telecommunications equipment makers including Huawei and ZTE, have greatly expanded their global market shares in recent years, China is bound to have a greater voice in the formulation of the 5G standard.

For example, if all three of China's major telecom operators boycott some of the technology in the 5G standard, it will be difficult for the technology to take off in China, Chen noted.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor: Liang Jun,Bianji)

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