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Deloitte: 'Near impossible' for the US to catch up with China on 5G

"The negative consequences could take decades to overcome"

Analysts from Deloitte have determined it would be ‘near impossible’ for the US to catch up with China in 5G due to a significant investment gap.

Deloitte determined that China outspent the United States by $24 billion since 2015 and has over ten times more sites ready to support 5G. Furthermore, in the first three months of 2017 alone, China added more 5G sites than the US in the last three years.

"China and other countries may be creating a 5G tsunami, making it near impossible to catch up," Deloitte said in its report.

The report notes part of the reason for this may be due to it being around 35 percent cheaper to install equipment in China when compared to the US. Deloitte recommends the US implements ‘lighter-touch policy frameworks’ to help reduce deployment times.

5G will offer huge economic and societal benefits to whoever leads. Beyond the increased speeds enabling new possibiliites for work and pleasure, such as real-time VR, it will also pave the way for smarter cities with driverless cars and other innovations. 

The report states there will be ‘disproportionate gains’ for the first countries adopting 5G technologies. An ‘era of untapped economic potential’ will be ushered in.

For some idea of the scale, IHS Markit recently predicted that 5G will deliver $12.3 trillion of global economic output by 2035.

Some analysts believe Chinese 5G technology is at least a year ahead of its Western counterparts. Huawei, for example, is often noted for its expertise in Massive-MIMO.

There’s speculation that some governments’ reluctance to use Chinese technology in critical telecoms infrastructure, citing national security concerns, is also to limit their funding and prevent the leadership gap from growing.

If the case, it looks set to be a plan that will backfire. Countries like the US will not just be slower to deploy 5G but a ban on Chinese technology could lead to less effective networks.

“Unless tangible steps are taken to help rebalance the private investment case for the upgrade with the demonstrated external benefits to other industries and the public good, the United States may risk losing the leadership it gained in the previous era,” wrote Deloitte.

“The negative consequences could take decades to overcome, and other countries are already making their moves."

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