The United States is being outspent by China in the race to build the next generation of wireless communication, known as 5G, and it risks losing out on the potential economic benefits, according to a report by consulting firm Deloitte published on Aug. 7.
China currently has 10 times more sites to support 5G communications than the United States. In just three months of 2017, Chinese cell phone tower companies and carriers added more sites than the United States had done in the previous three years, the Deloitte report found.
The first countries to adopt the next generation of wireless communications will experience “disproportionate gains,” as 5G brings an “era of untapped economic potential,” the report said.
China has outspent the United States by $24 billion since 2015 and has built 350,000 new cell phone tower sites, while the United States has built less than 30,000.
The report notes it may also be about 35 percent cheaper to install equipment necessary to add carriers to 5G in China as compared to the United States.
This report comes after the U.S. Federal Communications Commission announced new rules for bidding on high-band spectrum, which is expected to be used in the future for 5G.
Dan Littmann, a principal at Deloitte, said in a statement that “for the U.S. to remain competitive and eventually emerge as a leader, the race to 5G should be carefully evaluated and swift actions should be taken.”
The United States could still catch up, the report said, and recommended the U.S adjust policy to reduce deployment time, encourage carriers to collaborate, and implement a database of statistics and best practices.
Meanwhile, as Chinese telecoms firms like Huawei seek to provide its 5G networking hardware to mobile carriers around the world, countries are becoming wary that using Huawei’s equipment could pose serious security issues.
In South Korea, for example, major mobile carriers are reconsidering using Huawei equipment despite its cheaper prices, according to a Korea Times report. U.S. officials have warned South Korean telecom firms about the equipment’s potential to be used for espionage.
South Korea’s minister for science and technology, Yoo Youngmin, also acknowledged that “if Huawei’s equipment is introduced, there is the possibility that various security problems become an issue.”
By Kara Carlson. Epoch Times staff member Annie Wu contributed to this report.