China’s investment in 5G has left the rest of the world standing

The world’s economy is at a pivotal moment, and 5G is at the axis according to a new report from Deloitte Consulting. Countries who are first to adopt 5G will likely see greater and more sustained macro-economic benefits, given the network effects associated with adding billions of devices to the 5G network.

The report notes that China is a clear early mover on the deployment of 5G, outpacing and outspending the US in both relative and absolute terms.  Furthermore, the US risks losing its technology leadership position unless swift action is taken to unlock investment in the country’s communications infrastructure.

  • Since 2015, China has outspent the US by $24 billion. In that same time frame, China built 350,000 cell tower sites. The US built fewer than 30,000.
  • China plans to invest a total of $400 billion in 5G within the next five years.
  • The cost of the equipment network equipment is 35% cheaper in China than in the US. This means that the US would need to spend up to 2.67 times the amount that China spends to generate the same amount of network capacity.

We predict that 5G will expand the network effect dramatically by extending the reach of the internet to almost any kind of connection, by almost any kind of device, anywhere a wireless signal can reach. The potential economic benefits of 5G will soon become a key differentiator for cities looking to attract both businesses and residents. For the US to remain competitive and eventually emerge as a leader, the race to 5G should be carefully evaluated and swift actions should be taken.

Dan Littmann, principal, Deloitte Consulting LLP