5G Network Construction Quietly Speeds Up Operators' Small Step And Fast "Enclosure"

With the rapid development of operators, the construction of 5G network continues to speed up.

On May 17, the World Telecommunication Day, the three major operators of China Mobile, China Unicom and China Telecom said that they would cover 5G networks in all prefecture level cities nationwide by the end of the year.

In addition, China Mobile also specifically said that it plans to realize 5G independent networking for commercial use in the fourth quarter, and build the world's largest 5G network. According to Jian Qin, deputy general manager of China Mobile, up to now, China Mobile has built 124000 5G base stations, covering 56 cities, and developed more than 50 million 5G package users.

On the same day, China Radio and Television Network Co., Ltd. (hereinafter referred to as China Radio and Television) also made a new move, announcing at the launch conference of the 5G Hangzhou trial network of radio and television that the first 5G base station of radio and television in Zhejiang was officially opened. At the same time, China Radio and Television said that it would strive to basically achieve the national coverage of 5G radio and television by the end of 2021.

"At present, operators are building 5G networks, including the core urban areas of first tier cities and some second tier cities, and have been covering the network," said Cui Kai, senior research manager of IDC China's IoT field, in an interview with 21st Century Business Herald, "However, network coverage is one aspect. The main challenge of 5G business lies in the business layer. Without the support of the business layer, both users and operators have their own concerns and considerations in network construction."

2020 will be the first year of China's 5G large-scale network investment and construction. Photographed by Gan Jun

Speed up of 5G network construction

For the global telecom market in 2019, 4G network is still the focus of investment. According to GSA statistics, in 2019, a total of 141 operators worldwide invested in the construction of 4G networks.

However, 5G related investments have also begun to appear. By the end of 2019, 60 operators in 32 countries around the world had launched 5G network deployment.

For domestic operators, the 5G market has also become the focus of competition. In 2019 and the first quarter of 2020, the three major operators actively fought for 5G users. By the end of March 2020, the number of China Mobile 5G package users reached 31.72 million, and that of China Telecom was 16.61 million.

The latest data provided by China Mobile recently shows that its 5G package users have exceeded 50 million. Jian Qin further pointed out that according to the group's plan, China Mobile will cooperate with its industrial chain partners to develop 5G package users to exceed 100 million in 2020, drive the industry to achieve sales of 100 million 5G terminals, and create 100 group level application demonstration and 10000 provincial and regional characteristic projects.

The growth of operators' capital expenditure on 5G network is also in step with the increase of 5G package users. According to the 2020 capital expenditure forecast disclosed by the three major operators, the three major operators plan to invest about 180.3 billion yuan in the 5G network in 2020, with a year-on-year growth of 338%, accounting for 54% of the investment. Among them, China Mobile is 100 billion yuan, China Telecom is 45.3 billion yuan, and China Unicom is 35 billion yuan.

This also means that 2020 will be the first year of China's 5G large-scale network investment and construction.

The three operators also announced the construction plan of 5G base stations in 2020. Among them, China Mobile plans to build 250000 new stations in 2020, and China Telecom and China Unicom plan to build and share 250000 stations in the third quarter of 2020.

"It is expected that China Telecom and China Unicom will continue the construction of 5G base stations in the fourth quarter of this year, and 300000 to 350000 stations will be completed in the whole year, so the construction of 5G base stations of the three major operators is expected to exceed 600000 in 2020." In this regard, the research team of China Merchants Bank said that "with the overall recovery of operators' capital expenditure driven by 5G, the communication network equipment and its upstream supply chain will fully benefit."

Maturity still takes time

Although the 5G network is speeding up, the 5G technology still needs to be mature in terms of base station construction, application, user experience, etc.

The first thing is to improve the popularity of base stations. "Only by strengthening the construction of base stations and improving the popularity and coverage of the entire 5G base station can the 5G network be truly realized." Pan Helin, Executive Dean of the Digital Economy Research Institute of Zhongnan University of Economics and Law and author of 5G New Industry, told the 21st Century Economic Reporter.

However, Pan Helin stressed that in the process of 5G base station construction, a large amount of capital investment is required and the recovery cycle is long, which constitutes a major challenge in 5G construction. At the same time, considering that many current application scenarios are not highly digitized, 5G network applications have not yet formed a foundation.

"Many application scenarios need to be connected with 5G, but 5G is not enough, and a large number of application scenarios need to be adapted. However, the premise in this regard is the idea of network laying, followed by the integration of corresponding application scenarios." Pan Helin told the 21st Century Economic Reporter.

Cui Kai believes that from the bidding of the three major operators in April, 5G construction is not particularly difficult. At present, the price of the base station is declining, and the delivery cycle is also accelerating. For the challenge of 5G construction, it is more a business problem.

"If there is a real business or some pilot projects can really make a breakthrough, I believe that operators will be more active in network construction, and network construction will naturally drive users to change their machines and enter the process of positive cycle." Cui Kai pointed out, "But I think the positive cycle will take some time."

On the other hand, 5G has not yet shown an amazing experience at the user level, which is also a difficulty in promoting 5G. "5G has not brought disruptive improvements to the user's experience, thus causing the problem of unequal experience and charges." Cui Kai told the 21st Century Business Herald reporter, "It's hard for users to pay more for a network service that has not been substantially improved."

In addition, because the iteration of smart phones has its own cycle, the current 5G mobile phones are not fundamentally different from the current 4G mobile phones in terms of chips, memory, screens and cameras, and users have no incentive to replace 5G mobile phones, which further delays the further application of 5G.

"The development of the 5G industry is more about the development of the application level, not just the development of the network construction invested by the upstream equipment providers and operators of the industrial chain, but also the demand of users." Cui Kai pointed out that "the price of products and equipment will not go down, which will naturally affect the final application end."