China considers merging two major mobile operators in 5G push

The Chinese government is reportedly considering a merger of two state-run mobile operators in a bid to ensure the country assumes leadership in 5G networks.

According to Bloomberg, Beijing believes the combination of China Unicorn and China Telecom would allow it to invest more effectively than if the two did so separately.

The proposed merger would create a telco with 590 million customers, making it the world’s second largest mobile operator after domestic rival China Mobile, and provide the revenue and additional operational efficiencies to accelerate rollout.

China 5G

Both companies reportedly said they had no knowledge of any merger, which has been touted since early in the summer.

But the suggestion that China would consider such a move serves to show how the race to 5G is as much about politics as it is technology. 5G leadership would see a country take a disproportionate role in development, especially in fields like AI, and secure jobs and economic benefit.

Earlier this year, the US government blocked the proposed takeover of Qualcomm by Broadcom, fearing the latter’s lack of reputation for research and development (R&D) would see the initiative ceded to Huawei, which is headquartered in Shenzhen, China.

Huawei has also been effectively frozen out of the US market on national security grounds, while Australia has banned its telcos from procuring kit from the company. And that’s before you take into account the ongoing talk of a trade war between the US and China.

The first 5G networks will go live in the US later this year, serving up fixed wireless access (FWA) broadband to a number of major cities. The first 5G smartphones are set to arrive in 2019, with further deployments in Asia and Europe. The UK will see its first commercial service launch either in 2019 or 2020.

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.