700M’s status has been “regularized”. How will radio and television 5G play its cards under the new infrastructure?

The suspense of China Radio and Television Network Co., Ltd. (hereinafter referred to as "China Radio and Television") 700M "regularization" that lasted for many years has finally come to an end.

After 3GPP officially included China Broadcasting and Television’s 700MHz frequency band 2×30/40MHz technical proposal in the 5G international standard at the 87th Access Network Plenary Meeting last month, the Ministry of Industry and Information Technology also recently issued the "Notice on Adjusting the Frequency Use Plan of the 700MHz Frequency Band", which clearly stated that the frequency use plan of the 702-798MHz frequency band will be adjusted for mobile communication systems, and the 703-743/758-798MHz frequency band will be planned for mobile communication systems using frequency division duplex (FDD) working mode.

In the field of wireless communications, frequency bands have always been regarded as core resources because they serve as "channels" for transmitting signals. Each mobile phone will occupy a fixed frequency band and time resource when accessing the network. As communication technology moves from 1G to 5G, the available frequency band resources are becoming increasingly tight. The International Telecommunication Union (ITU) predicts that by 2020, the demand for international mobile communication frequencies will reach 1340MHz-1960MHz, and China's mobile communication frequency demand will be 1490MHz-1810MHz, with a spectrum gap of 1000MHz.

The official 5G status of China Broadcasting and Television 700M announces the official birth of the third category of global 5G standards (Sub-1GHz). Previously, according to the definition of 3GPP, the global 5G standard setting organization, 5G includes two mainstream frequency bands, FR1 and FR2. The former ranges from 450MHz to 6GHz, commonly known as "Sub-6G", and the latter ranges from 24GHz to 52GHz, commonly known as "millimeter wave". The competition of the three major standards in the future will also bring greater variables to the 5G market.

The never-ending battle for 700M

Due to its strong penetration, wide signal coverage, suitability for large-scale network coverage, and low networking cost, 700M has always been internationally recognized as the most valuable golden frequency band for communications.

Since the emergence of radio and television in my country was much earlier than mobile communications, the high-quality frequency band resources in the range of 48.5MHz-870MHz were first held by China Radio and Television, which also included the 700MHz that is now attracting much attention. Later, with the advent of the mobile communications era, the industry's demand for wireless frequency bands increased sharply, and China Radio and Television was forced to hand over the 806MHz-958MHz frequency band for use by mobile communications operators, but most of the frequency band resources below 806MHz are still occupied by China Radio and Television.

China Radio and Television, which owns 700M, did not want to waste the dividend of this golden frequency band. Taking advantage of the 2006 Beijing Olympics, China Radio and Television proposed to use the 700M frequency band for the construction of CMMB (China Mobile Multimedia Broadcasting, which can push digital TV signals to mobile phones, MP4 and other mobile devices). The latter achieved coverage in more than 300 cities across the country in just a few years, so that many mobile devices at that time used the support of CMMB function as a selling point.

However, China Radio and Television's "shortsightedness" soon ruined the fate of CMMB. Due to the neglect of the cultivation of the industrial ecology, CMMB adopted a "chargeable" model shortly after its launch when the industrial chain was not yet mature, which caused the number of users in the country to drop rapidly in a short period of time. The shrinking market also quickly fed back to the upstream of the industry, and equipment and chip manufacturers gradually withdrew. At this time, 3G commercial use and WiFi emerged, and CMMB was soon abandoned by the market, and the 700M frequency band entered an idle period.

Figure: Division of commonly used communication frequency bands in my country

At that time, the global 4G commercialization had already begun, and the 700MHz frequency band was also used as the main 4G frequency band by many countries. In 2013, the Japanese telecommunications department decided to allocate the 700MHz frequency band to operators for their mobile broadband services. In May 2015, Deutsche Telekom obtained the right to use the frequency band through an auction and stated that it would use the frequency band in full from 2019. In November of the same year, France completed the 700M auction for communication operators. The UK also stated that it would invest 550 million pounds in the next five years to clean up the 700MHz frequency band and use part of the spectrum for mobile broadband.

In contrast, in China, such precious frequency band resources have been abandoned, which has also made the three major operators who have longed for the 700MHz frequency band very dissatisfied. The latter have repeatedly "called on China Radio and Television to give up the 700MHz frequency band resources as the main 4G frequency band. For example, Wei Leping, director of the Science and Technology Committee of China Telecom, once publicly stated that the 700MHz high-quality frequency was left unused, leaving operators with only 1.8G, 2.1G and other frequency bands to build networks, which brought huge financial pressure to operators. However, the pressure from all parties ultimately failed, and the three major operators were finally only allowed to use the 2.3GHz-2.6GHz frequency band to build 4G.

However, frequency band resources are always scarce, which has caused the dispute over the ownership of 700M to continue into the 5G era. Due to the shrinking of radio and television business, China Radio and Television is also interested in seeking new business growth points at this time, and 5G business has naturally become a new goal for China Radio and Television. Although the industry is not optimistic, there are more and more rumors and voices that radio and television will enter the 5G market.

In February 2016, the State Administration of Radio, Film and Television held a meeting and clearly allocated the 700MHz frequency band to China Radio and Television Network Co., Ltd. In June 2017, China Broadcasting Mobile Network Co., Ltd., a joint venture between China Radio and Television Network Co., Ltd. and China CITIC Group Corporation, was officially established to operate the 700MHz frequency band. In June 2019, China Radio and Television officially obtained a 5G operating license, becoming China's fourth largest telecom operator, and finally put an end to the 700MHz dispute.

The undetermined “circle of friends”

China Radio and Television's entry into 5G not only means a change in the competitive landscape of the three major operators in the traditional domestic communications market, but also how to operate 5G services in the future and benefit upstream and downstream companies in the industry has attracted the attention of industry insiders.

As a new player that has never been involved in the mobile communications business before, building a complete 5G network is a prerequisite for China Radio and Television to enter the telecommunications market. This first requires a large amount of money to build the network, and also requires a team of talents with network operation experience to carry out business. In this regard, the industry tends to believe that China Radio and Television will adopt a "cooperation" approach and use the advantages of its partners to enter the 5G market. This was also confirmed by Zhao Jingchun, chairman of China Radio and Television, during the 2019 World 5G Conference: "China Radio and Television will actively select partners such as strategic investment, co-construction and sharing, and technical business to establish a broad 'circle of friends'."

However, there has been a lot of speculation in the industry about who China Radio and Television will cooperate with. Among them, State Grid Corporation of China (hereinafter referred to as "State Grid") has become the most likely partner by relying on its advantages in site resources, scenario requirements, and scale. As early as the end of last year, a report made by Industrial Securities revealed that State Grid Corporation will invest 60.6 billion to 83.4 billion yuan to establish a joint venture with China Radio and Television to build 5G base stations. Subsequently, a plan for State Grid to use China Radio and Television's 700MHz frequency band and 60MHz spectrum resources to build a 5G network was circulated on social platforms, but neither party came forward to confirm it.

Figure: State Grid and China Radio and Television jointly built a 5G network solution architecture

According to an industry insider, China Radio and Television Corporation has recently restarted a new round of joint venture negotiations with State Grid Corporation of China. The specific cooperation mode is still under discussion, and the definition of controlling rights is the focus of the discussion between the two parties. "The two parties have not reached an agreement on the details of the cooperation before, and it has also been delayed by the epidemic. However, the proposal of new infrastructure may accelerate the conclusion of cooperation between the two parties." The insider told Jiwei.com.

There are many judgments in the industry about the business that China Radio and Television will focus on in the future. "The bundled model of 'cable TV + broadband + 5G' should still be the main card of China Radio and Television's business." An operator familiar with the radio and television business told Jiwei.com that high-definition video is one of the important scenarios of 5G and is also the most likely entry point for radio and television.