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Chinese telecoms giant ZTE unveiled Sunday what it said is the world's first smartphone compatible with the lightening-fast 5G mobile Internet service that networks expect to have up and running by 2020.

The company said the Gigabit Phone is the first smartphone capable of download speeds reaching up to 1 gigabit per second (Gbps) - up to 10 times faster than the first generation of 4G services widely in use today.

The device, unveiled in Barcelona in northeastern Spain on the eve of the start on Monday of the Mobile World Congress, the world's biggest mobile fair, will allow for 360-degree panoramic Virtual Reality video and fast downloads of ultra Hi-Fi music and videos.

"With the new device, the way people stay connected will be changed forever. Focusing on 5G technologies will be one of the key priorities of ZTE's global development," a ZTE spokesman said.

Tech firms are racing to develop products that will be compatible with 5G, shorthand for the fifth generation of networks, which promise blazing fast connectivity for a generation used to streaming movies and TV directly to phones.

South Korean carrier KT Corp aims to offer trial 5G services during the 2018 Winter Olympics in Pyeongchang.

The first large-scale commercial deployment of the technology is expected in 2020.

Forrester analyst Thomas Husson said ZTE was using the phone to "showcase innovation" and "offer a glimpse into the future when people will be able to download full movies in seconds" but it was not likely to be a big seller.

"The sad reality is that this smartphone will not end up in consumers' pockets because both 5G and Virtual Reality are still years away to be a mass-market consumer reality," he added.

Founded in 1985, ZTE offers telecom equipment and services and has customers in more than 160 countries, according to the company.

It is the only Chinese smartphone vendor with a meaningful presence in the United States, where its 10 percent market share makes it the fourth-largest vendor.

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