5G race: China built 350,000 new cell sites, U.S. just 30,000
Other countries are outspending the United States in both relative and absolute terms. In these countries, the execution is faster and more capital efficient than it is in the United States, Deloitte said in its report.
The firm added that China and other countries are outpacing the U.S. in terms of wireless communication infrastructure spend, tower density and efficiency of execution.
While the U.S., Japan and South Korea have all made significant strides toward 5G readiness, the study found that since 2015 China has outspent the U.S. by $24 billion in wireless communications infrastructure, Deloitte said, noting that in that timeframe, China has built 350,000 new cell sites, while the U.S. has put up fewer than 30,000 new sites.
Even with this estimate normalized to account for the population to wireless subscriber ratio, the study concludes that the U.S. has underspent China in wireless infrastructure by $8 to $10 billion per year since 2015, the firm added.
Deloitte also noted that Chinas five-year economic investment plan anticipates spending $400 billion related to 5G, and that its more expensive for the U.S. to deploy equipment than it is for China.
Deloitte estimated that the equipment necessary to add a carrier in China is about 35% less than the U.S., meaning that the U.S would need to spend 2.67 times the amount that China spends to generate an equivalent amount of wireless network capacity.
Deloitte estimated that the civil engineering and permitting costs for Chinese operators to deploy a site is about 15% to 20% of the cost to do so in the United States.
The tower market in China is substantially different than the situation on the ground in the U.S. China Tower, the worlds largest tower company, is a joint venture of the top three Chinese mobile operators.
According to Deloitte, during 2017, China Tower was adding roughly 460 sites per day to its network. Deloitte said that China Tower has a total of approximately 1.9 million wireless sites, compared to approximately 200,000 in the United States.
A few months ago, China Tower agreed to share infrastructure with the countrys largest state-run power company, the State Grid Corp of China; the two companies will collaborate on a variety of infrastructure resource-sharing projects. ■