5G FIGHTING, a telecommunication war in China
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5G FIGHTING, a telecommunication war in China

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All along, the development of high-tech communication technology represented by 5G has touched the hearts of Chinese people.

Inside and outside the world, a little bit of wind and grass can attract attention.

In this section of the bones, in the Fujian Province of southern China, a small stone has actually stirred up huge waves...

On March 12, Fuzhou Municipal Radio Administration issued a letter to Fuzhou Mobile, agreeing to cancel the TD-SCDMA base station of Fuzhou Branch of China Mobile Communications Group Fujian Co., Ltd.


For a time, the voice of discussion has risen. Previously, on the topic of 5G, it has been heated up on the Internet. Nowadays, the rain is coming, and at this time, the frequency of the Qing Dynasty will be retired and the position will be ignored. Fuzhou’s move can not help but make people think. .


However, the imagination is floating, and whether this is intended to be 5G, we are not good at speculation.


At the moment, although 5G will sweep the world with the future, but when it comes to roots, will China, like the 3G era, use the power of the whole country to lay the 5G, and the industry peers may not have the bottom.


Tomorrow's business is hard to predict, but through the analysis of the history and opportunities in the past 3G and 4G construction process, financial and economics can make some prospects for the role of operators in the future 5G development process.


First, will: policy guidance


From December 19 to 21, 2018, Beijing, the Central Economic Work Conference was held.


Wei Leping, executive deputy director of the Communication Science and Technology Committee of the Ministry of Industry and Information Technology, said:


According to the capacity station construction, the 5G investment is about 1.5 times that of 4G. For the whole country, the 5G investment is expected to reach 1.2 trillion yuan. The 5G investment cycle is likely to exceed 8 years. The 5G frequency band is high, the base station is large, the base station is expensive, and the power consumption is high. Compared with 4G, the investment will increase substantially, and the investment mode may also change.


On January 10, Minister of Industry and Information Technology Miao Wei said that this year, China will carry out 5G commercial promotion, and in some areas will issue 5G temporary licenses for 5G pre-commercial. Strive to achieve the pre-commercialization of the 5G pilot in 2019, and ensure the official commercialization of 5G nationwide in 2020.



5G promotion plan


In terms of the three major operators, in accordance with the established plan, 5G networking will be conducted in selected pilot cities to achieve a three-stage trial period in 2018, a pre-commercial phase in 2019, and commercial scale in 2020.



Three operators' 5G schedule


In terms of China Tower, it was listed on Hong Kong stocks on August 8, 2018. According to the data released by it, China Railway Tower's capital expenditure in the telecommunications industry in 2016 and 2017 reached approximately 45 billion yuan and 40 billion yuan respectively, gradually becoming the business demand side of the communications industry. The important power.


With the 3G retreat, the 4G network is basically completed, and the expenditure of the China Tower has been reduced in 2018. However, with the laying of 5G, the investment of the China Tower will lead to a huge peak period.


Every technological innovation from 2G to 3G and 3G to 4G and the introduction of high-band spectrum have ushered in a substantial increase in the number of base stations. The growth rate of 3G/4G base stations in 2013-2015 is 32.93% and 95.41%, respectively. 50.70%, as of September 2018, the number of 3G/4G base stations reached 4.79 million. The bank expects to achieve nationwide coverage of 5G base stations in the future, which is expected to exceed the construction capacity of 4G base stations by a large margin. According to the current spectrum allocation plan and expected to be no less than 5 million outdoor macro station construction scale, it will bring huge inventory of Chinese sites to the China Railway Tower. Rate increase and new site requirements.



China Tower 2018 expenses


The communication industry has always been a concentrated expression of the will of the country. From the perspective of the Ministry of Industry and Information Technology and the central arrangement, all the links of 5G are steadily advancing, and China’s telecom operators are all central enterprises, and China’s telecommunications equipment supply is basically maintained in China. At the purchase rate of about 70%, China's 5G construction will be much less affected by external interference. Moreover, China has always had the tradition of concentrating on doing things, from the 3G standard TD-SCDMA to its own construction and investment. The role of policies and state-owned enterprises in infrastructure construction can be seen. In the 4G era, China is the nation's largest force, laying the world's largest 3G/4G network.



IMT-2020 (5G) Promotion Group 8 China 5G Technology R&D Test Phase III Test


At the same time, the world's major 5G industry participating countries and organizations have already mentioned the development and application of 5G to the top position of national or regional development. In particular, some countries have carried out large-scale suppression of Chinese enterprises in order to protect the domestic 5G market. Use government power to exert pressure, including global lobbying and rallying boycotts.



Mainstream countries and regions' 5G plans


According to data released by the GSMA, the total GDP achieved by the mobile communications industry increased from 2.37 trillion in 2013 to 3.6 trillion in 2017, and the contribution rate to GDP increased from 3.6% in 2013 to 4.5% in 2017. Therefore, the intergenerational upgrade of communication networks is also related to the economic cycle.


When the communication technology upgrade encounters economic downward pressure, that is, the technology cycle superimposes the economic cycle, the new generation network construction will accelerate.



The contribution of the communications industry to GDP


The importance of the communications industry can be seen as a result of the upstream and downstream industries, equipment manufacturers, terminal applications, industry practitioners and other aspects of the effectiveness of no less than any large-scale infrastructure.


In every economic cycle, infrastructure is often an important means of stimulating the market and the economy. Based on the current international situation and economic environment, the economic crisis of the ten-year cycle has not retreated. From the expenditure of the China Tower in 2018, it can be seen that The construction of base stations has fallen from the 4G high in 2016. With the promotion and application of 5G, the communication infrastructure will complete new expansion under the leadership of operators.


Second, the license: the most important


On January 7, 2009, the Ministry of Industry and Information Technology issued three third-generation mobile communication (3G) licenses for China Mobile, China Telecom and China Unicom, marking the official entry into China's 3G era.



Issuance of 3G licenses


In 2014, the China Tower was established under the leadership of the state and the three major operators jointly invested.


So far, the three major operators have transferred the stock base station to the China Tower and leased the new base station built by the China Tower. The three major operators no longer independently build base stations of their respective operating standards.




China Railway Tower Corporation's shareholding structure


In December 2013, China Mobile, China Unicom and China Telecom obtained the TD-LET license. Subsequently, in February 2015, China Telecom/China Unicom obtained the FDD-LTE license.



Promulgation of TD-LTE in 4G license


In terms of frequency bands, China Mobile has obtained 5G test frequency resources in the 2515MHz-2675MHz and 4800MHz-4900MHz frequency bands. Among them, the 2515-2575MHz, 2635-2675MHz and 4800-4900MHz frequency bands are newly added frequency bands, and the 2575-2635MHz frequency band is the re-cultivation of China Mobile's existing TD-LTE (4G) frequency band. China Telecom has obtained a 5G test frequency resource with a total bandwidth of 100MHz from 3400MHz to 3500MHz. China Unicom has obtained a 5G test with a total bandwidth of 100MHz at 3500–3600MHz.


From the perspective of frequency band distribution, China Telecom and China Unicom have obtained 100MHz spectrum resources of about 3.5GHz respectively. These frequency bands have been supported by the world's major operators and the most extensive industrial chain. The frequency used by China's 5G technology test is also 3.4. The G and 3.5G related frequency bands have mature industrial chains and are regarded by the industry as the 5G golden band.


This means that China Telecom and China Unicom can minimize the difficulty of 5G construction and reduce equipment costs. They also have many mature terminal support and have gained the advantage of competing with China Mobile in the early 5G.


Compared with the other two, China Mobile obtained 160MHz bandwidth resources in the 2.6GHz band (60M from the existing 4G frequency band), and obtained 100M resource allocation in the 4.9GHz band.


In the future 5G construction, China Mobile will still be the main force.


From a global perspective, the maturity of 2.6GHz is slightly lower than 3.5GHz, and China Mobile will independently support the industrial chain of this frequency band. Moreover, China's 2.6GHz still needs frequency cleaning, which may affect China Mobile's networking progress.


On December 10, 2018, the Ministry of Industry and Information Technology officially announced that it has issued the 5G system low-frequency test frequency license to China Telecom, China Mobile and China Unicom. At the same time, the Ministry of Industry and Information Technology said that it will choose the opportunity to issue 5G temporary licenses to the three major operators. According to outside speculation, the 5G temporary license will be issued in mid-2019, and a temporary license may be issued on the telecom day of May 17. Then, by 2020, a unified 5G license will be issued, and the three major operators will jointly operate a 5G network.


Third, the base station: the big investment


In 2009, the three major operators ushered in the first wave of 3G base station construction. In the year, the total construction base station exceeded 260,000 stations, and the capital expenditure related to 3G directly was about 170 billion, which promoted the total capital expenditure of the three major operators in 2009. Up to 280 billion yuan.


In the period of 2009-2014 of the 3G base station construction period, the construction of 3G base stations of the three major operators reached 1.565 million stations, driving the capital expenditure of the three major operators to 237.5 billion/year-376.9 billion/year, and from 2010 to 2014 year after year. Increment.


The most difficult of these is China Mobile's TD-SCDMA base station. Since the TD network and the current G network (2G network) are not technically smooth, China Mobile is in the process of 3G promotion, all base stations are newly built. The independent networking mode, that is, the implementation of 3G must face various difficulties such as rebuilding the network, re-site selection, and long construction period. Even with the support of the Ministry of Industry and Information Technology and the preferential policies of the state policy, China Mobile still lags behind the deployment of 3G networks. China Telecom and China Unicom.


In terms of terminal applications, since TD network is not compatible with other ordinary mobile phones, this means that if ordinary users choose TD network, they have to give up their mobile phones and switch to domestic TD models, which will undoubtedly increase the difficulty of TD promotion. In addition, because the technology is not mature enough, TD Internet has shown that the network speed is not as stable as China Unicom and Telecom, which is also a huge obstacle to the development of TD.


China Unicom, its WCDMA is the global mainstream 3G technology standard, with the most complete industry chain support and the most powerful suppliers, the number of users is also the fastest growth, so compared with other 3G standards has obvious Advantage.


In addition, in the later evolution to 4G, the current evolution of the WCDMA standard is also the most mature, and has been supported by the major communication equipment manufacturers. In terms of new base stations, China Unicom quickly opened up the market through mature technology and reasonable tariff standards, as well as huge terminal support. This is a very special historical opportunity in China's 3G construction.


In China Telecom, after acquiring the CDMA network operated by China Unicom, it successfully obtained the 3G license of CDMA2000. Due to the patent of this network standard, its tariff has been too high, and the cost is too high in the promotion process. China Telecom is operating CDMA2000. The 3G network is not much better than China Mobile.


From the perspective of capital expenditures, after the issuance of 3G licenses in 2009, China Telecom’s capital expenditures have gradually accelerated, from 38 billion in 2009 to 80 billion in 2013; China Mobile has maintained a total of 1.25 billion to 130 billion in the first four years. In 2013, with its further deployment of 4G base stations, capital expenditures soared to 184.9 billion; China Unicom's capital expenditures fluctuated greatly. In 2009, capital expenditures reached 112.5 billion, and then fluctuated between 700-100 billion.



3G base station situation (data source: China Industry Information Network)


From the issuance of 3G licenses in January 2009, the construction of 3G base stations has promoted a substantial increase in capital expenditure. During the promotion and construction of the entire 3G, the investment cycle of operators is about four years.


The return period of 3G may not be so long, such as China Mobile's 3G clear frequency retreat, from construction to application, but in just 5 years, China has entered the 4G era.


The investment of 3G is considered to be a waste of China's mobile resources in terms of economic behavior, but in the context of national policy and construction, it is an opportunity for China to break through the world's mobile communication standards, and the impact is not small. Without the breakthrough of 3G TD-SCDMA, 4G cannot be popularized in China as quickly, and 5G will not become a part of international standards.


On December 4, 2013, the three major telecom operators in China were all granted 4G TD-LTE licenses. On February 27, 2015, China Telecom and China Unicom were granted FDD-LTE licenses. China opened the 4G era.


China's 4G network gradually merges into two networks from 3G's three networks. The TD-LTE network has three major operators operating together. That is to say, in principle, there are 4G TD-LTE networks, and the three major operations. Businesses can enjoy the same network coverage. As for why China is outside the TD-LTE network, it will issue a separate license for the FDD-LTE network, which is jointly operated by China Telecom and China Unicom. This is considered to be one of the 3GPP organizations. This kind of feedback behavior is one of the behaviors of China to accept the 3GPP unified 4G network standard. Of course, it is also one of the behaviors of the big countries.


After entering the 4G era, the growth of 3G base stations slowed down, and China Mobile even stopped building 3G base stations, while 4G base stations were expanded on a large scale.


2014-2016 is the peak period for the construction of 4G base stations of the three major operators, reaching 1.02 million stations, 1.07 million stations and 1.12 million stations respectively; capital expenditures reached 376.9 billion yuan, 438.6 billion yuan and 356.2 billion yuan respectively, compared with 3G. The peak period of base station investment increased by 16%.


For China Mobile, China Mobile's 4G network has been scaled up and commercialized since 2014. According to the financial report data, from 2014 to 2017, China Mobile's 4G network investment was 80.6 billion yuan, 79.1 billion yuan, 83 billion yuan and 65.7 billion yuan respectively. In 2018, this figure is forecasted to be 58.5 billion yuan. The investment in 4G networks exceeds 360 billion yuan.


The total number of China Unicom and China Telecom 4G base stations was 850,000 and 1.17 million respectively. According to this estimate, plus the cost of other supporting facilities, the construction of the three major operators on the 4G network is at least 800 billion.


China Tower Company was also established by the three major operators in 2014, and promoted the sharing of base stations, and the construction of 4G base stations peaked. From 2016 to 2017, the capital expenditure of the three operators showed a decline of 19%-13%/year. In 2017, the capital expenditure of the three largest operators was 308.3 billion yuan.


The capital expenditure of the three major operators has gradually increased since 2013. After the rapid expansion in 2014-2015, it will reach in 2016.

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