Summary Bullets:
- ZTE has completed a 5G New Radio (NR) field test with China Mobile in the Chinese province of Guangdong.
- This tests demonstrates ZTE’s readiness to supply large-scale 5G rollouts and take advantage of the unique opportunities posed by standalone 5G in particular.
Network equipment vendors have been promoting their progress in 5G for years. So, when a vendor announces the completion of yet another 5G field test in early 2019 – many months past widespread industry pronouncements that “5G is here!” – it’s easy to casually disregard. It’s also easy to miss the real significance of this activity.
Case in point: In late January, ZTE announced that it had completed a 5G NR field test with China Mobile in the coastal South China province of Guangdong (a neighbor to Hong Kong). The test – using equipment based on the 3GPP’s Release 15 standard – showed a single-user peak downlink rate of 1.8 Gbps at distances up to three kilometers, using 100 MHz of bandwidth in the 2.6 GHz spectrum band. It followed an earlier test in late 2018 that enabled a 5G voice call, also over 2.6 GHz. And it included a wide range of network elements, including core, RAN, and even user devices – allowing ZTE to show off a breadth of assets that not all of its competitors have.
Why is this important? For starters, China Mobile’s influence over the global industry is hard to overstate; it is the world’s largest operator in terms of subscribers, with over 900 million. That scale alone gives China Mobile considerable power to direct technology choices and investments worldwide. But, its importance to ZTE in particular is even greater. Historically, more than half of ZTE’s total company revenue has come from China. And its close relationships with China’s mobile operators have long been a key asset, boosting ZTE’s global market share and allowing the vendor to regularly showcase its ability to serve operators of unmatched scale.
Yet, there’s another important aspect of this announcement: the Guangdong field test included standalone 5G – that is, 5G that doesn’t rely on LTE or an LTE core. This is significant for a few reasons. Based on the expressed intentions of operators there, China is likely to be the first country in the world to have a standalone 5G network. This gives China’s operators even greater influence over the long-term evolution of 5G technology, and it could also influence the opinions that operators around the world have today about standalone 5G.
Most operators currently favor non-standalone 5G, owing to its maturity relative to standalone 5G (including the maturity of user device support) and their desire to protect their 4G investments. Those concerns subside over time as standalone 5G technology and ecosystems mature and China’s operators prove the readiness of standalone 5G. Increasingly, other considerations come in to play, such as the flexibility that standalone 5G poses for operators to choose their network suppliers, as well as the potential to use standalone networks to more fully realize 5G’s full potential – for example, through Internet of Things applications.
But, proving out standalone 5G has other implications, too.
Standalone 5G offers RAN vendors like ZTE an opportunity to gain market share. The first wave of 5G deployments, non-standalone 5G, will inherently favor incumbent LTE RAN suppliers. These incumbents will have a natural edge, just by offering 5G upgrades to existing multi-standard LTE solutions as an easier 5G evolution path than switching suppliers and replacing deployed gear. For ZTE, which doesn’t have as much global RAN market share as its three primary competitors, standalone 5G therefore represents a major opportunity to win new clients and expand its global footprint. And given standalone 5G’s potential to address a range of Internet of Things use cases, credibility in standalone 5G can translate into tremendous value.
To capture this value, however, vendors need to be early in demonstrating both the viability of standalone 5G and their own authority and expertise in this area, which the Guangdong tests help ZTE to achieve. While ZTE will look to support both standalone and non-standalone needs, some of the vendor’s biggest rivals may be slower to promote standalone 5G because they would prefer operators not delay their 5G investments to consider standalone solutions.
This month, ZTE and China Mobile plan to construct 100 pre-commercial 5G sites and conduct end-to-end performance verification tests in multi-vendor networks, to get an even clearer sense of what commercial 5G networks will be like. Going forward, the 5G spending wave offers RAN challengers like ZTE a long-awaited chance to improve their position in the global market for the next several years – as long as they are prepared by having passed the necessary tests.