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China Shakes Up Telecom Leadership Ahead of 5G Rollout – WSJ – Wall Street Journal

China Shakes Up Telecom Leadership Ahead of 5G Rollout – WSJ – Wall Street Journal

People visit a China Unicom stand displaying 5G technology during the Mobile World Conference in Shanghai in June.


Photo:

-/Agence France-Presse/Getty Images

China’s Communist Party is making leadership changes in the top ranks of the state-owned telecommunications giants ahead of the country’s widely anticipated rollout of next-generation wireless networks.

The party’s powerful Central Organization Department named Li Guohua as the new general manager at

China United Network Communications Group
Co.


600050 1.21%

, known as

China Unicom
.


CHU 1.94%

In addition,

China Telecom


CHA 1.92%

Chief Operating Officer

Liu Aili

resigned and will assume Mr. Li’s former job as head of the national postal service.

China Unicom and China Telecom are two of the country’s three state-owned telecom operators, and will be among the institutions responsible for buying and rolling out fifth-generation, or 5G, wireless networks in the country in the coming years.

The personnel moves could indicate a push by Beijing to speed up the rollout of 5G technology in China, said Edison Lee, a telecom analyst at the investment bank Jefferies Group LLC.

Prior generations of cellular technology were led by U.S. companies like

Qualcomm
Inc.

and European firms like

Ericsson

AB and

Nokia
Corp.

Now China is aiming to be a leader in 5G technology, which is expected to build on current 4G networks with faster internet speeds for consumers, while powering cutting-edge technologies like autonomous driving and virtual reality.

“The current trade war may have prompted China to change its mind to accelerate 5G rollout at a lower cost,” Mr. Lee wrote in a research report.

China’s Huawei Technologies Co. has budgeted $800 million this year on research and development for 5G. The company, the world’s largest telecom-equipment maker, is developing the 5G gear that operators like China Unicom and China Telecom will purchase and roll out for consumers.

ZTE
Corp.

, China’s second-biggest telecom equipment maker, is also a leader in 5G technology, but the Shenzhen-based firm was hit with a monthslong ban on U.S. equipment purchases after the U.S. found the company violated the terms of a settlement related to its earlier evasion of sanctions on Iran and North Korea.

Mr. Lee said the ban may be figuring into the leadership shuffle among China’s telecommunications firms. “The U.S. export ban on ZTE, and the U.S. government’s clear intention to set back China’s tech ambitions, has prompted China to rethink its 5G strategy,” he said.

The secretive Central Organization Department made the appointments, which were announced by the companies this week, reflecting the Communist Party’s direct control of country’s telecom giants.

Xiao Xiao

in Beijing contributed to this article.

Write to Dan Strumpf at daniel.strumpf@wsj.com

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