The epidemic cannot stop the pace of 5G new infrastructure construction, 180 billion yuan to accelerate network construction

According to the initial scenario in 2020, the mobile phone industry will usher in the era of 5G upgrades. After experiencing multiple quarters of declining sales, the industry expected the smartphone market to have explosive growth, but unfortunately the epidemic completely changed this scenario.

However, in China, with the implementation of strong control methods, the epidemic has been gradually brought under control and cooled down. The Political Bureau of the CPC Central Committee recently held a meeting to study the current key tasks of COVID-19 prevention and control and stabilizing economic and social operations, and clearly proposed to speed up the construction of new infrastructure such as 5G networks and data centers, which is what we now commonly call "new infrastructure."

So what is "new infrastructure"? In fact, compared with traditional infrastructure such as railways, roads, and airports, it focuses more on the construction of infrastructure on the technological side, including 5G infrastructure, ultra-high voltage, intercity high-speed railways and intercity rail transit, charging piles, big data centers, artificial intelligence, and industrial Internet.

The 5G infrastructure, which ranks first among the new infrastructure, widely covers the entire 5G industry. The industrial Internet, Internet of Vehicles, enterprise cloud computing, artificial intelligence, telemedicine, etc. mentioned in the future will all require 5G as the support of the industry, and the mobile terminal market in the 5G new infrastructure will be the first to benefit.

China's 5G mobile phone market will account for half of the world's

2020 is generally considered to be a key year for 5G to drive the wave of phone replacement. Market research firm Counterpoint previously predicted that global 5G smartphone shipments will exceed 270 million units in 2020. The agency said that the penetration rate of 5G phones will increase from about 1% in 2019 to more than 15% in 2020. The main markets include developed countries and regions such as China, Europe, the United States, Australia and New Zealand.

Counterpoint also pointed out that in 2020, the number of 5G mobile phone products in the Chinese market is expected to exceed 100, and will cover the mid-range and low-end price segments below 2,000 yuan in the third and fourth quarters. The shipment volume of 5G mobile phones in the Chinese market is expected to exceed 150 million units in 2020 (accounting for more than half of the global market share, about 55.56%).

Research firm Strategy Analytics recently released a report saying that against the backdrop of a sharp drop in 2G/4G mobile phone shipments in January, China's 5G mobile phones still achieved a slight increase of 0.9% month-on-month, and its market share has reached 26.26%. The 5G replacement wave seems to be unstoppable.

Fang Jing, chief analyst at Xinda Electronics, said in an interview with Jiwei.com: "According to the product planning of mobile phone manufacturers and the plans launched by chip manufacturers, it is estimated that the domestic 5G mobile phone shipments in 2020 will be 130-150 million units, and the annual mobile phone shipments (including 5G and 4G) will be around 320-340 million. Obviously, 5G mobile phones will account for more than half of the total mobile phone shipments this year, which has a strong driving force for the entire 5G industry."

After experiencing a continuous decline in the past few years, the domestic mobile phone market will inevitably enter a wave of replacement this year in response to the maturity of 5G mobile phones and the improvement of related network coverage. Even though it was interrupted by the epidemic at the beginning of the year, the domestic mobile phone market experienced a sharp decline in February, down 54%, but it rebounded significantly in March.

According to the latest data released by the China Academy of Information and Communications Technology on April 13, in March 2020, the total shipments of the domestic mobile phone market were 21.756 million units, a year-on-year decrease of 23.3%. Among them, 2G mobile phones were shipped 698,000 units, 4G mobile phones were shipped 14.844 million units, and 5G mobile phones were shipped 6.215 million units. In January this year, domestic mobile phone shipments fell 38.9% year-on-year. In February, the epidemic was the most serious, with a year-on-year decrease of 56%. The decline slowed down in March, with a year-on-year decrease of 23.3%.

Interestingly, among the smartphones shipped in China in March, Android phones accounted for 87.9%, and from January to March, Android models accounted for 88.8%, which means that Apple phones have been hit hard. According to Fang Jing, chief analyst of Xinda Electronics, there was a Women's Day shopping event in the early part of March, and users were enthusiastic about buying phones. In addition, the domestic leading promotions promoted consumption growth.

Affected by the epidemic, all originally scheduled offline press conferences were converted to online releases. Even so, most of the leading domestic mobile phone manufacturers' 5G new products in the spring are still on schedule. On February 13, Xiaomi took the lead in releasing this year's first flagship 5G models, Xiaomi 10 and Xiaomi 10 Pro. Subsequently, domestic mobile phone manufacturers including OPPO, vivo, Huawei, ZTE, and Nubia have released their latest 5G mobile phone products. At present, although the epidemic has not ended, the market competition has become fierce.

It is reported that ZTE and Xiaomi have proposed to launch at least 10 5G mobile phones in 2020, and vivo will launch at least 5 5G models. There are also industry chain news that 4 of the 5 new products released by Apple next year will be 5G models. Liu Hong, vice president of vivo and president of the Chinese market, said in a previous interview that vivo's sales rebounded significantly in March, and its sales in the first week even increased by more than 10% compared with the same period last year. Among them, 5G products performed well and became a new growth momentum for the market.

The epidemic cannot stop the pace of 5G new infrastructure construction

On March 24, the Ministry of Industry and Information Technology issued the "Notice on Promoting the Accelerated Development of 5G", which involves a total of 18 measures in five aspects, aiming to fully promote 5G network construction, application promotion, technology development and security assurance.

After the concept of new infrastructure came out, the first thing that can be seen is that the investment capital of 5G infrastructure has increased significantly. According to the 2020 5G deployment plans of the three major operators, China Mobile plans to build 250,000 5G base stations in 2020, with a 5G-related investment of about 100 billion yuan; China Telecom and China Unicom also plan to build a total of 250,000 5G base stations in 2020, with 5G investments of about 45.3 billion yuan and 35 billion yuan respectively.

According to rough estimates, the 5G-related investment budgets of major operators have soared to more than 180 billion this year, an increase of more than 300% year-on-year. As the market's expectations for base station construction increase, it is expected that operators' base station construction will reach a maximum of 800,000 this year, and base station construction will first benefit the corresponding base station manufacturers, including Huawei, ZTE, Ericsson, China Information and Communications Technology, etc. In addition, looking upstream, PCB orders have now reached June, and China Mobile's second-phase 5G wireless network equipment procurement has greatly exceeded market expectations.

Even though we are in the midst of the epidemic, 5G investment in new infrastructure has not been affected. Fang Jing remains optimistic about 5G investment in new infrastructure. "From the perspective of infrastructure, it is not too affected. On the one hand, the domestic epidemic is under control quickly, and on the other hand, it will only cause short-term sales pressure. However, the real service of 5G infrastructure is the use of 5G mobile phones next year or the year after. Based on the optimistic expectations for the future, the three major operators will inevitably accelerate 5G investment." He said.

5G new infrastructure does not only refer to the construction of 5G networks, it also includes extensive 5G industry investment, and 2020 will be the year of full expansion of 5G. Qualcomm Global Vice President Hou Mingjuan explained the meaning of 5G in 2020: "I think it has at least three meanings. First, at the network layer, this year's 5G networking mode has evolved from non-independent networking to independent networking; second, 5G smartphones have rapidly expanded from the flagship level to the mainstream level, and more users can enjoy the 5G experience; third, 5G has expanded to more terminal types, such as 5G PC, 5G VR, XR and other devices."

"The country emphasizes new infrastructure. Against this background, 5G will prompt operators and their partners to actively build 5G networks, which will give China's 5G market greater driving force this year. Looking back at the end of the year, I believe that the layout and investment in 5G will be able to offset some of the impact of the current epidemic." Hou Mingjuan added.

At present, the epidemic has not had any impact on the country's 5G network construction. Operators have been working overtime during the epidemic, wearing masks to protect themselves while carrying out communication construction. Although many people are worried that the epidemic will affect the economy and that operators' funding will be tightened and construction will be delayed, resulting in the delay of 5G networks, the arrival of the new infrastructure policy has dispelled many people's concerns.

Qin Fei, director of vivo Communication Research Institute, was interviewed when talking about 5G new infrastructure. He said: "5G new infrastructure is a huge benefit. During the epidemic, everyone saw how important communication and infrastructure security are to the country. At the same time, it also reflects that China is at the forefront of the world in terms of communication network security, which is better than many developed countries. 5G construction will not slow down, but will speed up. As the speed of 5G network construction accelerates, our 5G signals will get better and better."

New infrastructure helps popularize 5G mobile phones in all price ranges

From the perspective of 5G mobile phones, there are now quite a variety of 5G mobile phone models. According to data from the Ministry of Industry and Information Technology, as of March 26, my country's 5G products have reached 76. From February to March alone, 10 mobile phone manufacturers and brands have successively released 5G flagship phones, which has increased market popularity and brought consumers more 5G mobile phone choices.

With the advancement of 5G new infrastructure, 5G will enter more vertical fields and provide a foundation and opportunities for innovation in a wide range of industries. For example, during the epidemic, many people adopted remote working, which made us rely more on mobile Internet applications and services to meet our daily needs. Under the influence of the epidemic, more and more people will realize the importance of wireless connections, and 5G will bring a more important connected world and support new usage scenarios, such as telemedicine, smart transportation, and smart manufacturing.

Lei Jun, chairman of Xiaomi Group, believes that this year will still be a key year for 5G mobile phone replacement, because in the short term, the epidemic has caused most people to change their work and lifestyle and rely more on the Internet, which has a certain role in promoting the popularization of 5G mobile phones. In the long run, consumers' demand for mobile phones will be released after the epidemic is over.

Xiaomi Group Vice President Lu Weibing once said in an interview with the media that it is necessary to accelerate the construction of a new generation of information infrastructure and the construction and commercialization of information infrastructure such as 5G networks. More favorable policies are on the way, which has further strengthened the confidence in the development of the mobile phone industry.

OPPO Vice President Wu Qiang also expressed his views on the new 5G infrastructure during the media group interview at the OPPO X2 5G new mobile phone launch conference. He believes that this is good news for mobile phone manufacturers. After all, if the 5G infrastructure is well built, then 5G terminals will inevitably have a broad market. He believes that the country will introduce a series of policies and plans for the promotion of 5G products in the future.

As an important player in the 5G mobile phone market, vivo has successively released 5G mobile phones including iQOO3, NEX 3S, Z6 and S6 after the Spring Festival. At the same time, vivo stated that in view of the future development trends of the Internet of Things and the industry, it will make a comprehensive layout from 5G standards to terminals.

In terms of 5G, vivo's strategy is "radical" compared to other manufacturers. According to Qin Fei, after China announced the commercial use of 5G last year, vivo quickly launched its own 5G mobile phone. The reason for launching 5G mobile phones so quickly is that vivo has increased its investment in 5G since 2016, including product pre-research. At present, vivo has launched seven 5G mobile phones, three last year and four after the Spring Festival this year. Their prices range from 2,000 yuan to 6,000 yuan, and the price of mobile phones has quickly been reduced to 2,000 yuan.

A mobile phone industry analyst said that whether the price of 5G mobile phones can achieve full coverage this year mainly depends on how manufacturers such as Qualcomm and MTK launch 5G mobile phones of different prices and grades with end customers.

Since Qualcomm announced in September last year that it would launch different levels of 5G terminal product portfolios in 2020, it has launched Snapdragon 8, 7, and 6 series 5G SoCs with the aim of accelerating the commercialization of 5G. In addition to Qualcomm, MediaTek Dimensity 1000 and 800 series will also have corresponding 5G terminals launched in the second and third quarters. Of course, Huawei HiSilicon is also actively promoting the development of its 5G chips to high, medium and low levels, with a 5G product portfolio including Kirin 990, Kirin 985, and Kirin 820, while another domestic 5G chip manufacturer, Tsinghua Unigroup, has also released related 5G mobile phones.

"In the second quarter of this year, 5G mobile phones priced at 2,000 yuan will be released and listed on the market one after another, and in the third and fourth quarters there will also be 5G mobile phones priced around 1,000 yuan. This is the consensus of the industry. By the end of the year, the price of 5G mobile phones will further drop to below 1,000 yuan." The mobile phone industry analyst told reporters.