Chinese 5G Plans Start At $10, Showing The 'Race to 5G' Isn't Much Of One

Wireless

from the race-to-nowhere dept

We’ve noted for a while that the “race to 5G” is largely just the byproduct of telecom lobbyists hoping to spike lagging smartphone and network hardware sales. Yes, 5G is important in that it will provide faster, more resilient networks when it’s finally deployed at scale years from now. But the society-altering impacts of the technology are extremely over-hyped, international efforts to deploy the faster wireless standard aren’t really a race, and even if it were, our broadband maps are so terrible (by design) it would be impossible to actually determine who won.

A big component of the “race to 5G” includes the idea that we must “beat” China. So far, the general consensus is that the only way to “defeat China” is to mindlessly pander to U.S. telecom giants in the form of merger approvals, tax breaks, subsidies, and other perks. But these favors not only don’t result in better or more broadly available networks as promised, they only cement consolidation, limited competition, higher prices, and generally poor customer service. The other part of “beating” China involves blacklisting Chinese gear makers like Huawei for spying on Americans, then refusing to share public evidence of doing so.

A lack of mid-band spectrum here in the States has resulted in measurably slower 5G networks than we’re seeing in other countries, including China. And while US regulators focus largely on kissing entrenched providers asses via dubious, unpopular policy decisions (killing all telecom consumer protections, rubber stamping the Sprint, T-Mobile merger), China’s State-owned carriers China Mobile, China Unicom and China Telecom have taken a wide deployment lead.

How much of a lead is largely impossible to given the unreliability of both US and Chinese data. Transparency isn’t traditionally a priority for state-owned telecom agencies. While here in the US, ISPs have spent years lobbying against better maps, since better maps would highlight the industry’s deployment and competition shortcomings. And while we have made some small progress toward better mapping, US wireless carriers, which have spent the last few years lying about where 5G is available, are already lobbying to exclude 5G networks from these improvements.

Comparisons on pricing are a little easier, though, there too, that’s a race we’re pretty clearly not winning anytime soon.

Here in the States, consumers already pay some of the highest prices in the developed world for 4G mobile data. So far, 5G looks to be even more expensive, with carriers like Verizon not only charging users $10 more for 5G, but banning HD and 4K video unless consumers pony up even more money.

While numerous aspects of China’s state-owned telecom industry are ugly (surveillance, censorship) and unworthy of emulation, growing competition among MVNOs (mobile virtual network operators), only established in 2013, has driven down 5G prices to the point where users can nab a 5G connection starting around $10 per month:

“Prices have been coming down fast in the ongoing price war, with China Mobile now selling its entry level 5G package for just 69 yuan ($9.76 US) a month, 31% off the original price. A premium 5G package that originally was priced at 128 yuan ($18.08 US) now sells for 88 yuan ($12.43 US), if the customer signs a one-year contract.

China Unicom, another competitor, has responded with price cuts of its own, reducing some plan prices by 30 percent. A popular 5G package called ?5G Refreshing Ice Cream? costs 90 yuan ($12.72 US) per month, not including a small prepaid service fee and a 12-month contract. A premium 5G package is priced at 103 yuan ($14.55 US) per month and comes with a 24-month contract.”

Like here in the States, there’s often monthly data limits (many of these plans have a 30 GB monthly cap). Still, these price points aren’t even remotely comparable to U.S pricing, which is also notably higher than many European providers. That’s likely to get worse now that the DOJ and FCC ignored experts that repeatedly warned approving the Sprint T-Mobile merger would drive up sector costs and drive down sector pay over the next three to five years.

There really isn’t a “race to 5G.” The speed at which a user in China, or Germany, or France gets connected really doesn’t impact a U.S. user and vice versa. But even if there were a race, our regulatory incompetence all but ensures we can neither measure nor actually win it. In large part because, for the better part of thirty years, U.S. telecom policy has consisted of fecklessly pandering to industry giants, either by gutting consumer protections (net neutrality, privacy), doling out poorly-tracked subsidies, or rubber stamping competition-eroding mergers. As such, much of the U.S.’ perceived superiority… doesn’t actually exist.

And instead of fixing our own problems (reforming campaign finance laws to help firewall telecom policy from lobbying, supporting pro-competition polices to drive deployment and lower prices, fixing our broken broadband maps, blocking mergers that harm the market), our policy focus under the Trump administration has largely involved green lighting harmful industry consolidation, and crying about Chinese vendors like Huawei while pretending to care about government surveillance run amok.

Filed Under: 5g, china, competition, race to 5g