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Recently, the Ministry of Industry and Information Technology held a”Special Conference on Accelerating 5G Development”, which clearly stated that it is necessary to accelerate the progress of new infrastructure construction such as 5G networks. For a time, 5G became a leader in”new infrastructure”.

The huge incremental market under the policy dividend can not help but make people excited. However, can 5G really bring benefits that match market potential?

81315b01c7924355962c835d66d7448d - "New Infrastructure" Looking at 5G? Let ’s talk about this first

In this epidemic prevention and control, 5G has Very eye-catching performance, the 5G base station construction of Vulcan Mountain Hospital and Raytheon Mountain Hospital was completed within a few days. In the subsequent resumption of work and resumption, 5G also provided a communication foundation for some online offices and online education.

At the same time, the guidance of the”new infrastructure” policy makes 5G once again a major benefit of the communications industry.

According to the China Academy of Information and Communication Technology, it is estimated that from 2020 to 2025, China’s 5G commercial use will directly drive total economic output to 10.6 trillion yuan, and indirectly drive total economic output to 24.8 100 million yuan will directly create more than 3 million jobs.

The construction of 5G will further promote the construction of other new infrastructures such as data centers, artificial intelligence, and the Internet of Things. Therefore, 5G is regarded by many as the first shot of”new infrastructure” .

At the recent special conference of the Ministry of Industry and Information Technology, the three major telecom central enterprises and tower companies have stated that they will actively accelerate 5G construction this year.

So, what is the current progress of 5G base station construction in China? In the huge incremental market, can 5G become a profit for the three major operators?

See 5G ? After this hurr, let me say

As expected Promoting 5G construction

In fact, under the tide of 5G construction, the three major operators are hurrying to pay operation”. As of the end of February, 80% of China’s 5G network construction was implemented as planned, and the three major operators have opened 156,000 5G base stations across the country.

At the special meeting of the Ministry of Industry and Information Technology, the three major operators reported the latest progress in the construction of 5G base stations.

China Mobile stated that it will strive to reach 300,000 5G base stations by the end of 2020 to ensure that 5G commercial services will be provided in all cities at and above the national level by 2020.

Based on the scale of China Mobile’s first phase of 5G base stations, as of the end of February, more than 80,000 5G base stations, including 286 5G base stations in key areas for epidemic prevention and control, have been opened.

On the day of the conference, China Mobile initiated the centralized purchase of the second phase of 5G wireless network master equipment, covering 28 provinces (cities and districts) across the country, with a total procurement scale of more than 230,000 5G base stations.

When the first and second phases add up, the number of 5G base stations is 310,000, which is in line with China Mobile’s 2020 5G base station construction plan.

The chairman of China Unicom Wang Xiaochu disclosed at the meeting that as of March 5th, China Unicom has opened about 66,000 stations, of which 43,000 stations were opened by itself and 2.3 were shared by telecommunications. 10,000 stations, the two parties opened a total of 50,000 stations to build and share base stations, basically completed the first phase of the grid connection goals.

China Telecom said that 74,000 5G base stations have been opened. In order to further accelerate the construction of 5G, on March 10, China Telecom and China Unicom issued the “Announcement on the Centralized Prequalification of Jointly Purchasing Projects for Wireless Main Equipment for 5G SA New Construction Projects in 2020”.

Not only that, the construction of 5G independent networking is also accelerating. China Mobile took the lead in launching bidding for independent networking equipment, and strived to achieve commercialization of 5G SA networks in the fourth quarter.

On March 5th, China Mobile released the 2020 tender announcement for the centralized purchase of new equipment for the 5G SA core network in 2020, involving companies in 8 regions/31 provinces across the country, with a total price limit of 4.8 billion yuan.

From the perspective of global 5G construction speed, South Korea, the first commercial 5G country, plans to build 230,000 5G base stations in its 85 cities, and the second commercial 5G United States plans Build 600,000 5G base stations.

In China, according to the current construction progress and the bidding of the three major operators, it will exceed 600,000 5G base stations in 2020.

It can be seen that, whether it is the actual number of 5G base station constructions or the overall 5G network planning, China is far ahead in terms of 5G infrastructure construction.

See 5G ? After this hurr, let ’s say

Expensive 5G base station

5G is about to shine in 2020, but few people see the pressure from the three major operators of 5G base station construction.

The chairman of China Mobile Yang Jie once said that the construction cost of 5G is relatively high, and a 5G base station is about three times that of a 4G base station.

It is reported that the price of a single base station at the beginning of the 5G trial commercial stage is about 500,000 to 600,000 yuan, and the price of a single base station at the mature stage of 5G deployment will drop to 300,000 to 40. Ten thousand yuan.

In addition to base stations, the deployment of 5G networks also includes transmission networks and core networks. The cost of a transmission network converted to a single base station is about 50,000 to 100,000 yuan. The 5G core In the early stage of deployment, the cost of a single city was about 10 million to 30 million yuan.

Even if the price of 5G base stations will drop by about half in the future, in order to build a complete 5G network in China, millions of 5G macro stations and tens of millions of small base stations will be counted. The investment cost will be at least 2-3 trillion yuan.

As 5G base stations are put into use on a large scale, electricity bills will also rise linearly.

Some experts said that the mobile base stations of the three operators consumed a total of about 27 billion kWh of electricity in 2018, and the total electricity bill was about 24 billion yuan. Under the same coverage, the energy consumption of 5G networks will reach 243 billion kWh, and the electricity bill will reach 216 billion yuan.

Let’s calculate. In 2018, China Mobile’s net profit was 117.781 billion yuan, China Unicom’s net profit was 10.257 billion yuan, China Telecom’s net profit was 21.21 billion yuan, and the total profit of the three companies was 149.248 billion yuan.

The electricity bill of 216 billion yuan means that the profits of the entire communications operator industry will be eaten up, and a huge loss of 66.8 billion yuan.

In other words, the huge power consumption cost caused by the large power consumption of 5G base stations will be one of the biggest burdens of 5G operating costs.

Informed sources inside the operator revealed that most of the current 5G base stations are upgraded, so the power supply capacity of existing base stations cannot meet the demand.

According to the current distribution of more than 10,000 base stations in Guangshen and Shenzhen, electricity costs alone, and the costs that operators have to pay for a month are as high as 100 million yuan. So when 5G is not yet commercially available, most 5G base stations are off.

See 5G ? After passing this hurr, let me say

Declining revenue

Although 2020 is commonly referred to as the year of 5G large-scale commercial use in the industry, the three major operators The gradual decline in revenue has undoubtedly made 5G construction seem stretched.

On March 19, China Mobile released its 2019 financial report showing that as of December 31, 2019, China Mobile’s operating income was RMB 745.9 billion, of which, communications service revenue It was RMB 674.4 billion, an increase of only 0.5%. Profit attributable to shareholders was RMB 106.6 billion, a year-on-year decrease of 9.5%.

This is the second consecutive year-on-year decrease in annual net profit of China Mobile after the 2015 fiscal year.

In terms of personal market, China Mobile ’s net increase in subscribers continued to decline in 2019, and mobile ARPU (average revenue per user) was RMB 49.1, compared with 2017 and 2018. Compared with 57.7 yuan and 53.1 yuan, they also continue to decline.

So it seems that due to the impact of speed increase and fee reduction, market saturation, fierce market competition, and the gradual fading of 4G traffic dividends, domestic communication operators led by China Mobile have not yet come out Throbbing period.

Among them, the unlimited data package is the culprit. At the beginning, there were more than 100 mobile phones with unlimited data. Later, they cut prices each other. Many consumers think that 4G tariffs should be like this. Low price. In addition, there are home broadband, IDC racks, cabinets, cloud facilities, etc., all reducing prices.

The price war of the three major operators”would rather kill a thousand enemy than fear of self-harm 800″ is finally reflected in performance.

In the 5G era, the three major operators that have invested heavily in the infrastructure level have to raise the price of 5G communications fees. So far, the 5G packages launched by the three major operators, the lowest 5G packages also cost more than 100 yuan.

But for individual users who have come from the 4G era, the traffic should be cheap, and it can be cheaper. Such expensive 5G traffic is prohibitive for 5G users, and the growth rate of new users is not as fast as expected.

Obviously, the limited users under a single 5G base station have insufficient monthly communication expenses and even electricity costs. Operators are not only losing money in the short term, but in the long run Cost pressures will be amplified.

On the one hand, it is the policy to increase fees and reduce fees and accelerate the construction of 5G. On the other hand, the market is saturated and performance declines under fierce competition. How to level this bowl of water is the three major operations. Difficult problems that businesses cannot avoid.

bc8d3c4c95ee4b22a60cb733e1b69552 - "New Infrastructure" Looking at 5G? Let ’s talk about this first

No Fight the”price war”

Today, the three major operators have finally sat down to talk about the construction and operation of 5G.”Price war”.

At the special meeting of the Ministry of Industry and Information Technology, Chairman of China Telecom Ke Ruiwen made it clear that China Telecom will not fight a price war and hopes that the entire industry will jointly promote joint construction and sharing. Jointly maintain the industry ecology and jointly prosper the 5G industry.

The chairman of China Unicom Wang Xiaochu said at the meeting that China Unicom and China Telecom have jointly built and shared base stations. As of now, it is estimated that the two parties have saved a total of about 10 billion yuan in investment costs. It will cooperate with China Telecom to build a base station.

In this regard, the Ministry of Industry and Information Technology also raised related requirements at the meeting, including:strengthening the collaborative development of upstream and downstream enterprises in the industry chain, and enriching 5G technology application scenarios to foster new economic growth. Click and so on.

It is needless to say that the coordinated development of industrial chain enterprises can naturally bring the communications industry back to life and work together to build 5G without a price war.

But what is more notable is how to enrich 5G application scenarios. Although 5G has huge market potential, the business model at this stage is not very clear. 5G mobile phone traffic is just one of many applications. How to open up more 5G commercial scenarios has yet to be explored.

This epidemic has opened up the application of 5G in medical, prevention, control, emergency, logistics and other fields, and is expected to kick off the large-scale popularization of 5G-related applications.

If we can further find 5G commercial landing scenarios and profit models, then the three major operators will achieve revenue growth on 5G and reduce the operational risks brought by huge investments. To be possible.

[Science Cloud Report Original]

Reprinted please indicate the source:Science Cloud Report