Accelerate the development of the entire 5G industry chain and push information consumption to a new level

China Energy Storage Network: The fifth generation of mobile communication network (5G) is related to China's seizing the commanding heights of global information technology, and can promote the formation of a strong domestic market with its massive investment and consumption potential. As a traditional strong province in the central region, Hubei has always strived to be at the forefront in the development of the information industry. Recently, the cadres on secondment from the National Development and Reform Commission conducted an in-depth investigation of the development trend of Hubei's 5G industry and consumption, visited Hubei Enshi Tower Company and basic telecommunications companies, and formed relevant policy recommendations to accelerate the development of the entire 5G industry chain and promote information consumption to a new level.

my country's 5G base station network construction is accelerating, and terminal consumption is gradually starting

The entire 5G industry chain mainly includes three parts: First, the upstream base station system laying. Base stations include outdoor base station towers, radio frequency modules, indoor small and micro base stations and other wireless equipment, as well as optical fiber cables, power supplies and other transmission equipment. The main construction entities are tower companies and operators such as China Mobile, China Unicom and China Telecom. Second, the midstream network construction and operation and maintenance. Including the early planning and design of wireless access networks and the later optimization and operation and maintenance, the main construction entities are main equipment providers such as Huawei and ZTE and operators such as China Mobile, China Unicom and China Telecom. Third, downstream product applications. Including traditional electronic products such as mobile phones and computers, as well as emerging consumer products such as wearable devices, Internet of Vehicles, Internet of Things, and virtual reality.

From the upstream point of view, the laying of 5G base stations is being promoted in a "massive" manner. From the perspective of the number of construction, Hubei and other places are actively building the "10,000-station project". So far, Hubei has built about 1,500 5G base stations. In the second half of the year, on the basis of the complete site and wiring, the construction of base stations will be significantly accelerated. It is expected that about 8,000 base stations will be completed by the end of October, and 10,000 base stations will be built within the year. The pace of construction in the southeastern coastal provinces is faster. For example, as of mid-May, Guangdong, Beijing, and Shanghai have built 14,200, 5,000, and 3,000 5G base stations, respectively. From the perspective of the construction model, the efficiency of base station co-construction and sharing is relatively high. In order to give full play to the respective technical advantages of operators and tower companies, Hubei Mobile, China Unicom, and China Telecom built core network parts such as base station signal transmission according to their own needs, and tower companies built auxiliary parts such as tower bodies and supporting power supplies. Operators' communication equipment is mounted on "one tower" to reduce duplicate construction. For example, the sharing rate of newly built towers in Enshi has increased from 8.4% in 2015 to the current 76%. From the perspective of construction density, future construction demand is considerable. Because 5G networks are built on higher frequency bands, the coverage of base stations is relatively small. At the same time, the number of 5G application scenarios has increased, so in order to ensure the high speed and wide coverage of 5G, the density of base stations will be higher. The Chinese Academy of Engineering predicts that the number of base stations should be at least twice that of 4G base stations.

From the perspective of the midstream, 5G network construction is "racing". First, key equipment companies are "racing" for patent technology. Enshi Tower Company reported that my country has achieved the transition from "following" 3G to "running side by side" with 4G, and then to "leading" 5G. At present, the technological competitive advantage of key enterprises has been initially established. Among the 5G technology standard essential patent declarations of more than 20 companies in the world, Chinese companies account for more than 30%, ranking first, of which Huawei's patents account for 15%. Second, basic telecommunications companies are "racing" for investment. At present, the three major operators are all increasing their investment in 5G test networks. Enshi operators reported that this year's 5G network investment by China Mobile, China Unicom, and China Telecom headquarters is expected to reach 17 billion yuan, 9 billion yuan, and 8 billion yuan, respectively, and there is a high possibility of additional investment in the second half of the year. Third, the comparative advantages of the two networking technologies are "racing". There are two standards for 5G networking. Non-standalone networking (NSA) refers to the transformation of 5G networks based on existing 4G infrastructure. This model has low cost but low performance, which still hinders the development of 5G services such as industrial Internet and virtual reality. Standalone networking (SA) refers to the construction of new 5G networks. This model has high performance but high cost. At present, the three major domestic operators have different networking plans. China Mobile and China Unicom tend to use NSA first and then SA, while China Telecom tends to directly use SA networking.

From the downstream point of view, 5G terminal consumption has "appeared" one after another. China may be the first market to realize large-scale commercial use of 5G, which is a global consensus. From the perspective of personal consumption, first-mover terminal products such as smartphones will be gradually launched in the second half of the year. Enshi Telecom Company expects to launch 7 5G mobile phones by the end of September, including brands such as Huawei, Xiaomi, vivo, and Samsung; China Mobile expects the first batch of smartphones to obtain network access licenses in July and will be launched in succession at the end of July, with more than 30 product models. From the perspective of traffic charges, the unit price of 5G traffic charges may be lower than that of 4G. Basic telecommunications companies such as Enshi Mobile reported that the traffic of the main 5G package is expected to be 200G per month, with a charging standard of 300 yuan and a unit price of 1.5 yuan/G, while the traffic of the 4G package is about 40G, with a charging standard of 199 yuan per month and a unit price of 5 yuan/G. From the perspective of public consumption, "5G+" typical scenario demonstration applications are widely carried out. The 5G communication infrastructure of Beijing Daxing Airport has been completed, with 93 base stations built, which can achieve 100,000 people on 5G without lag. Wuhan is creating a "smart military games" and will build a 5G demonstration and comprehensive experience area before the opening of this year's military games. The flood prevention emergency drill in Jingzhou, Hubei, uses 5G smart unmanned boats, which can realize digital visualization of river patrols and real-time hydrological flow rate and flow monitoring.

Overall, the construction of upstream 5G base stations and the laying of midstream networks are progressing rapidly, the downstream consumer markets have been launched one after another, and the framework for the development of the entire industrial chain has been established.

my country's 5G commercialization faces three major challenges, and its scale advantage cannot be fully utilized

For 5G, technological advantage is the core and scale advantage is the support. At present, Huawei and other companies have initially established technological advantages and fired the first shot in my country's global leadership in the 5G industry. Next, it is urgent to establish scale advantages for 5G commercial use as soon as possible to promote the formation of a positive cycle of "scale-technology". From the current situation, there are three major challenges in establishing scale advantages for 5G commercial use.

First, large-scale base station laying faces the problem of insufficient investment funds. On the one hand, the investment gap in 5G base station construction is generally large. Enshi Tower Company reflects that while the number of base station construction may increase exponentially, since the weight, power consumption and bandwidth of 5G base stations are about 3 times, 2.5 times and 2.5 times that of 4G base stations respectively, auxiliary equipment such as power supplies need to be reinstalled, and the unit price of base station construction is at least about 1/3 higher than that of 4G. According to calculations by many institutions, the scale of 5G investment is about 1.2 to 1.4 trillion yuan, but so far the total investment of the three operators is only about 35 billion yuan. Even with additional investment, the funding gap is still large. On the other hand, it is difficult for the main body of base station construction to increase investment. Basic telecommunications operators are under great pressure to reduce operating income. For example, mobile operating income and net profit in the first quarter decreased by 0.3% and 8.3% year-on-year respectively. In addition, the cost of 4G network construction in the early stage has not been recovered, and there is indeed financial pressure to increase the construction of 5G networks on a large scale. At the same time, under the pressure of capital turnover, the three major operators have asked the tower company to lower the rental fees of base station equipment. Since 90% of the tower company's operating income comes from the rental of the three major operators, the tower company's capital turnover is also under pressure.