China’s 4G market is approaching saturation. According to the financial reports of China’s three major telecommunication network operators, the growth rate of 4G users is decelerating. Nonetheless, the three operators have started investing on 5G-releated equipment. 5G and IoT (Internet of Things) are anticipated to be the future key drivers sustaining revenue growth of the Chinese telecom industry. IoT requires the aid of 5G and NB-IoT (Narrow Band Internet of Things) in order to make full use of its advantages. The NDRC has ordered the three operators to ensure the commercialization of 5G by 2020. The construction of NB-IoT network has already been carried out in several cities by the three companies before 5G being officially commercialized. The three operators only need to upgrade the existing base stations instead of spending additional cost on building new one. In addition, from a peak speed perspective, 5G is 10 times faster than 4G. Many business opportunities including Internet of vehicles, IoT, smart cities etc. will arise amid the popularization of 5G in the foreseeable future. The telecommunication network operators’ APRU will increase which thus lead to a positive impact on the sector in the long run. Industry leader is expected to have significant capital advantage and relatively lower risk given the oligopoly structure in China’s telecom industry.

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