China Unicom and China Telecom have given the majority of their 5G base station contracts to Huawei and ZTE. Combined with previous contract awards from China Mobile, the two telecoms equipment makers now account for more than 80% of China’s 5G base station contracts.
Why it matters: The contracts of the three major carriers show that state-owned telecoms firms have a strong preference for homegrown players in the buildout of their 5G networks even though Beijing has pledged to give foreign companies “equal opportunities.”
“China always sticks to equal and fair principles when purchasing 5G telecom equipment. We never preset the market shares for domestic and foreign enterprises.”
—Miao Wei, minister of China’s top telecom regulator, last year during at keynote speech at the World 5G Conference
Details: Huawei and ZTE were awarded more than 80% of China Unicom and China Telecom’s latest bid for a fifth generation network they are jointly building, according to Chinese media Caixin.
- While the two carriers didn’t reveal the specific shares of each telecoms equipment vendor, the contract shows the rest of their budget for a buildout plan of a total of 250,000 5G base stations this year will also go to Swedish company Ericsson and Datang Telecom Group, a smaller Chinese player.
- Finnish company Nokia, which also participated in the bid, was not awarded anything.
- In China Mobile’s latest tender for the buildout of its targeted 5G base stations this year, Huawei and ZTE were awarded a combined share of 85.9% of the contract, by the number of base stations. Ericsson, the only foreign company granted a tender, took only an 11.4% share. Nokia was also not awarded anything.
Context: China Unicom and China Telecom announced last year that they would team up to jointly build a 5G network to cut costs.
- An investment of RMB 1.23 trillion ($174 billion) is needed to build China’s fifth generation networks, according to China Securities International.
- The three carriers’ combined budget for 5G network buildout in 2020 is RMB 180.3 billion.