5G to ring in New Year with 'explosive growth'

Months after its commercial rollout, tech finds traction among consumers

For Zhang Qiang, who runs a smartphone store in Beijing, November was a very busy month. Eight out of 10 potential customers who visited his store bought a 5G smartphone each.

"Most of them came to check out 5G handsets. Not everyone bought one, but I can see mounting enthusiasm for 5G. Days of COVID-19-related hardship may be finally making way for good days," Zhang said.

His optimism appears appropriate. More than 700,000 5G base stations have been built across China. They cover all prefecture-level cities. More local smartphone users are now eager to upgrade to 5G.

As of Oct 31, 124 million 5G smartphones were shipped out of factories to retailers across China. That's impressive considering that commercial 5G services were rolled out just one year back, according to the China Academy of Information and Communications Technology, a think tank affiliated with the Ministry of Industry and Information Technology.

In October alone, 5G handsets accounted for more than 64 percent of all smartphones shipped in China. Again, that represents a surge from January's 15 percent. The penetration rate is expected to hit 80 percent next year as Chinese smartphone manufacturers and telecom operators are promoting 5G. They have lowered prices of 5G devices as well as 5G data plans, company executives and industry experts said.

Expectations of faster 5G growth arose after the top leadership of the Communist Party of China called for demand-side reform earlier this month, in pursuit of the new dual-circulation development pattern that has the domestic market as the mainstay with the domestic and foreign markets boosting each other.

Zhong Zhengsheng, chief economist of Ping An Securities, said: "In the future, amid consumption upgrade and people's desire for a better life, the industrial structure in China will better adjust to the changes of consumption. This is one kind of demand-side reform we hope to see."

Reform could also prove a near-to-long-term positive, if the optimism of Jian Qin, deputy general manager of China Mobile, the world's largest telecom operator by mobile subscribers, is any indication. "Next year will see an explosive growth of 5G smartphones. We forecast that over 350 million units of smartphones will be sold in China and 280 million units of them will be 5G handsets."