Chinese Regulator Moves One Step Closer to Liberating Cellular Network Spectrum: Shifting Competitive Dynamics in Private 5G

China's 5G private networking market will shift in 2025 as the Ministry of Industry and Information Technology (MIIT) moves toward enabling independent enterprises to gain access to licensed mobile network spectrum. Currently, the three state-owned telcos—China Telecom, China Unicom, and China Mobile—dominate the sector, having built tens of thousands of private 5G networks. A recent MIIT announcement directs operators and provincial governments to assist enterprises in accessing spectrum for pilot networks, signaling a potential regulatory shift. While past efforts to encourage private 5G trials have had limited impact, the 2022 allocation of spectrum to COMAC, a state-owned manufacturer, sets a precedent for government-linked organizations.

Despite significant deployments, telco revenue from private 5G remains modest, raising questions about the sector’s financial viability. The MIIT’s latest move could be a turning point, but the implications for the broader adoption of private cellular networks will become clearer as these developments unfold.

The move of the Chinese regulator to open up access to non-Communication Service Provider (CSP) actors is just one of a few recently discussed global spectrum liberalization initiatives.

• Ofcom is considering spectrum sharing in the N77 band (3.7 – 4.2 Gigahertz (GHz)) to facilitate private 5G networks. This spectrum will be available for shared spectrum access, in addition to portions of the 1.8 GHz & 3.8 GHz bands, which have already been opened for spectrum sharing in 2020.
• The Australian Communications and Media Authority (ACMA) opened the 3.8 GHz spectrum for so-called area-wide licenses for enterprises in early 2024. The first 47 licenses were granted in November 2024.

For System Integrators (SIs) and infrastructure vendors, this shift provides an easier opportunity to offer comprehensive, end-to-end digitization solutions without the need for extensive involvement from traditional carriers. By leveraging these newly available spectrum bands, SIs can integrate private 5G capabilities into broader digital transformation strategies, allowing enterprises to gain more control over their connectivity, enhance security, and reduce dependency on legacy network providers. This evolution opens up new revenue streams and opportunities for collaboration between vendors, enterprise users, and regulators, driving the next wave of innovation in private wireless networks.

For CSPs, this serves as a critical indication that their licensed spectrum assets, while valuable today, will increasingly lose their impact as the primary value proposition for private cellular networks. As spectrum liberalization initiatives continue to become the norm on a global scale, the competitive landscape shifts. Non-CSP actors, including enterprises and SIs, are gaining access to spectrum previously reserved for licensed use, effectively reducing the exclusivity and strategic importance of traditional spectrum holdings. Consequently, CSPs find themselves confronted with new competitive pressures in a largely unknown landscape that is dominated by SIs, Managed Service Providers (MSPs), and other region- and vertical-specific players.

While the decision to liberalize more mobile network spectrum will certainly provide enterprises with more opportunities to use a private cellular network, the battle for enterprise connectivity contracts will not be decided by spectrum alone. In fact, numerous ABI Research surveys among (potential) private cellular implementers have identified that even in countries with liberalized mobile network spectrum, enterprises prefer to partner with SIs and MSPs for network management and operations.

Consequently, all different companies on the supply side of the equation (be it CSPs, infrastructure vendors or SIs) will need to expand their offerings to sharpen their business model around provisioning different use cases in an as-a-Service approach.

• First and foremost, private cellular providers will need to build up their network management and operation capabilities. Infrastructure vendors, SIs, and MSPs should work form partnerships to offer pre-packaged, vertical-specific network solutions with built-in automation for security, compliance, and performance Service-Level Agreements (SLAs).
•  Provide enterprises with fully managed, outcome-based network services tailored to their operational needs. Technology advancements toward Artificial Intelligence (AI) and Machine Learning (ML) in telco networks can be used in this context to ease network management, such as by implementing self-optimizing, self-healing private networks.
• Furthermore, suppliers of private cellular should also build up their partnership network to be able to offer concrete use cases to enterprises. The development of what is often to referred as “use case factories” is a good first step in the right direction—where infrastructure vendors and CSPs offer the network as a platform and leave it to SI partners to bring in the relevant software developers to provide enterprise-grade applications to power these specific use cases.