Limited set of vendors benefiting from China's 5G rollout; government stimulus will drive 5G rollouts and CSP digital transformation

Limited set of vendors to continue benefiting from China’s 5G rollout

China’s 5G deployment was the driving force behind TIS market growth in 2020

Following the temporary shutdown associated with China’s initial battle with COVID-19 in 1Q20, China’s CSPs accelerated the rollout of 5G RAN, deploying over 700,000 5G base stations in 2020, in addition to the 100,000 base stations that were rolled out in 2019. TBR believes the country is nearing peak 5G RAN deployment levels after growth for Huawei, ZTE and China Communications Services (CCS) slowed in 4Q20, but China’s investment in 5G will remain elevated in 2021, with between 600,000 and 1 million base stations set for deployment as the government makes 5G a centerpiece technology of its newest national infrastructure development initiative.

A significant and growing portion of China’s government stimulus is being allocated to enable the ICT sector to accelerate infrastructure and ecosystem development. China has earmarked over $1.4 trillion for ICT initiatives over the next five years. These investments will primarily benefit CCS, Huawei and ZTE, though Ericsson and smaller China-based vendor CICT are also taking part in 5G RAN builds. China’s government heavily influences CSPs’ contract allocation and prioritizes business for domestic firms. Huawei was allocated the bulk of business in the 5G cycle, increasing its share from the LTE cycle, and TBR expects Huawei will maintain its leading market share, despite supply chain disruptions.

TBR believes that due to stockpiling, China’s ICT ecosystem has sufficient chipsets to meet the country’s 5G RAN deployment targets in 2021, which suggests the supply chain encumbrances instituted by the U.S. government are not having a significant impact on China’s original 5G deployment timelines.

Register today for an exclusive TBR webinar examining TBR’s Telecom Infrastructure Services (TIS) Global Market Forecast for 2020-2025, including the expected market impact of unprecedented government support in telecom over at least the next five years and increasing support, and mandate, from Western-aligned governments for CSPs to swap out gear from Huawei and ZTE.

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