Telecom Giants Step up Efforts to Develop 5G Technologies

Employees of China Telecom install a 5G base station in Shanghai on Feb 21. [Photo/China News Service]

Chinese tech companies are answering the central authorities' call to accelerate efforts to build new telecom and IT infrastructure so as to lay a sound foundation for the development of emerging technologies and to inject new vitality into the nation's digital economy.

China Mobile, China Unicom and China Telecom, the big-three telecom carriers, have launched their second-phase 5G purchasing plans as part of their joint efforts to build at least 550,000 5G base stations this year.

Wu Chaoze, chief analyst at China Securities, said the three carriers' combined capital expenditure is expected to stand at around 300 billion yuan ($42.9 billion) this year, with one third of that going to 5G.

Similarly, S&P Global (China) Ratings said in a report earlier this month that 5G investment is on the verge of peaking, with annual capital investment by the big-three Chinese operators expected to increase by 6 percent on an annual basis this year.

This year, China will invest about 120 billion yuan in 5G infrastructure, the report said.

The estimates came after a meeting of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, which called for accelerated efforts to build new infrastructure, earlier this month.

In addition to 5G base stations, internet data centers, infrastructure for artificial intelligence, and the industrial internet are also the focuses.

Sun Pishu, chairman and CEO of Inspur Group, China's largest maker of servers, said the accelerated efforts to build new infrastructure for 5G, cloud computing and AI are constructing a digital highway to make China a technological superpower.

"We have already felt that the new infrastructure-including cloud computing, big data and AI-has played a huge role in fighting the novel coronavirus outbreak. The more digital and intelligent the enterprises are, the faster they resume work," Sun said.

"At the critical moment of resuming work and preventing the epidemic, the new digital infrastructure can support the stable operation of society and public governance," Sun added.

Lenovo Group Ltd, the world's largest personal computer maker, is also answering the call to build new infrastructure. It kicked off construction of its 2 billion yuan smart plant in Shenzhen, Guangdong province, on March 11.

Lenovo said it aims to build the Shenzhen plant into a model of digital manufacturing and Industry 4.0, so as to inject new vitality into industrial upgrading.

The plant, scheduled to be completed in three years, will cover 280,000 square meters. It will produce personal computers, servers and other smart electronic products, and will be highly automated with the industrial internet playing an important role in boosting its operations, the company added.

Xin Yongfei, a technology expert at the China Academy of Information and Communications Technology, said building new infrastructure will help construct the foundation for the internet of things, digital transformation and high-quality development.

China's leading digital payment platform Alipay unveiled a three-year plan on March 10 to support the digital transformation of 40 million service providers by working with 5,000 independent software vendors.

Simon Hu, CEO of Alibaba's financial affiliate Ant Financial, said: "We want to build the new infrastructure of a digitalized service industry by upgrading Alipay into a digital lifestyle platform."