Where exactly does China's 5G technology lead?

Source: Deep Sound (ID: deep-echo)

Author: Peng Fangting  

Source: CTIA report from the US Wireless Communications and Internet Association A National Spectrum

《 A National Spectrum   Strategy

to Lead in 5G》

China's lead in the 5G race is undeniable.

According to the latest news, currently, at least 16 provinces and municipalities in China can make 5G calls. This progress is enough to illustrate the rapid speed at which China is promoting the commercial use of 5G.

China's Only in the 4G era did China truly become one of the global leaders in mobile communication technology, and naturally, it does not want to lag behind in the 5G era. For China, 5G is not only the protagonist of the next round of information technology revolution but also a stepping stone to consolidate its position in technological innovation.

Currently, in this land, 5G has become an object of great importance at the capital, industrial, and national levels.

「 China Where does China's 5G lead? 」

According to the basic infrastructure process of mobile communication technology, the construction cycle of 5G can be divided into the planning period, construction period, and application period in chronological order. Currently, China's 5G is at the entrance of the construction period. Once the government issues 5G commercial trial licenses, operators and terminal equipment manufacturers will make every effort to move towards the application period.

This fully prepared posture is largely due to the advantages of various participants in aspects such as standard setting, technological research and development, base station construction, and equipment development.

● Standard Formulation

According to the 43rd Statistical Report on the Development of China's Internet, as of March 2018, China's submitted 5G international standard documents accounted for 32% of the global total, and the proportion of leading standardization projects reached 40%, with both the speed and quality of advancement ranking among the world's top.

It is important to note that in the field of communication, when two entities communicate, their interface (the connection point between two adjacent entities) must meet certain standards, and communication equipment manufactured according to the standards can only be interconnected.

Therefore, in order to promote the application of 5G globally, the international communication industry standardization organization (3GPP) needs to formulate a series of standards. The active participation of Chinese companies illustrates the important role China plays in the development of 5G.

For example, in the process of formulating 5G performance standards, China Telecom presided over the technical discussion and standard formulation of 5G base station baseband performance and led the writing of official 3GPP technical standards;

In December 2017, China Mobile took the lead in completing the first version of the international standard for 5G network architecture; in November last year, China Unicom led 3GPP in releasing the first Sub-6GHz 5G independent deployment terminal radio frequency consistency test standard, providing a technical basis for 5G terminal consistency testing and providing a reference for the formulation of relevant national standards.

● Technological Patents

According to the 5G patent report released by the German patent data company IPlytics at the end of last year, Huawei, ZTE, OPPO, and the China Telecom Science and Technology Research Institute together hold 36% of the world's 5G standard-essential patents (5G SEP).

This figure is more than double the share of Chinese companies in 4G patents. In contrast, US tech giants, including Qualcomm and Intel, only hold 14% of key 5G patents.

IPlytics' April report

《 Who is leading the 5G patent race》

As of April, Huawei holds 1554 patents, surpassing Nokia (1427) and Samsung (1316), making it the company with the most 5G standard-essential patents. Regarding Huawei's leading position, the Wall Street Journal commented, "Huawei's influence in the 5G field is incomparable to that of Chinese companies in previous generations of wireless networks."

Moreover, standard-essential patents, as the name suggests, are irreplaceable or technically unavoidable. Therefore, when Chinese companies have an advantage in 5G technology patents, global telecommunications companies will inevitably have to pay them patent fees during the implementation of 5G networks.

● Base Station Construction

The news that multiple pilot cities have made 5G calls has proven that China's 5G is trying to move towards market application, and behind this is the active 5G base station planning and construction by the three major telecommunications operators.

According to the latest news, China Mobile stated in March that it will add 30,000 to 50,000 5G base stations in 2019, actively promoting the construction of 5G experimental networks; China Unicom announced in April that it will open 5G experimental networks in 40 cities, forming the latest deployment layout of "7+33+N"; China Telecom will also add 6 more cities to the 6 cities where it has already conducted tests, forming a "6+6" layout.

CITIC Construction Investment Research Report predicts that China will build and open about 100,000 5G base stations in 2019, while the global estimate is around 300,000 to 400,000.

If divided by city, Shanghai, as the first China Mobile 5G trial city nationwide, is expected to build more than 10,000 5G base stations this year. By 2021, the city will have built a total of more than 30,000 5G base stations, achieving deep coverage of the 5G network;

As the only province that participated in all three tests of 5G experimental technology testing, large-scale testing, and application demonstration, Guangdong plans to build nearly 10,000 5G base stations in 2019, aiming to achieve large-scale commercial use in Guangzhou and Shenzhen in 2019 and the entire province in 2020.

Compared with European and American countries, where procedures are complicated and communication costs are high, China's base station construction has developed rapidly with government support, which can greatly accelerate the commercialization of 5G in China.

● Terminal Equipment

       In At the 2019 Mobile World Congress (MWC2019), one of the most focused objects was 5G mobile phones, with Chinese mobile phone manufacturers such as Huawei, ZTE, OPPO, Xiaomi, Lenovo, and OnePlus being the focus. Their 5G devices were launched successively in 2019.

       In addition to common mobile devices, Chinese terminal manufacturers are also promoting applications in various industry segments. Based on its layout in 5G, AI, cloud, software, chip development, and the Internet of Things, Huawei released a 5G communication hardware, MH5000, specifically designed for the automotive industry in April.

       Beyond terminal manufacturers, Chinese operators are also promoting the application of 5G terminals.

       China Mobile once stated that in 2019, they would purchase tens of thousands of terminals and invest 100-200 million yuan in terminal subsidies. Regarding 5G terminal prices, China Mobile estimated that the price in 2019 would exceed 8,000 yuan, and data terminals would exceed 3,000 yuan. By 2020, the price of 5G mobile phones would drop to the 1,000 yuan range, and data terminals would drop to 500 yuan.

       China Telecom released trial commercial mobile phones in the third quarter of 2019, with end-to-end network and service testing of 2500+ units. China Unicom hopes to achieve mass market launch of commercial 5G terminals by the fourth quarter of 2019.

       From the construction period to the application period, this is not something that can be achieved overnight, but China's various advantages ensure its leading development.

「 Challenges for the Pioneers 」

       While European and American countries are generally struggling with spectrum resources and 5G base station construction, China, under the leadership of the government, faces less resistance.

       However, being at the forefront of the 5G industry, looking ahead, China faces an unclear development prospect for 5G; looking around, it faces competition with other countries.

       Regarding the development prospects of 5G, Huawei founder Ren Zhengfei once said, "In fact, human society does not have such an urgent need for 5G now. People's current needs are broadband, and the main content of 5G is not broadband. 5G has a lot of connotations, the occurrence of these connotations requires more demand to come, and it also requires a long time.......The development of 5G will be slow."

       In other words, consumers have not yet formed a clear demand for 5G, which reflects in the development process of 5G itself, resulting in an unclear 5G business model. Although 2019 is considered by most people as China's 5G year, "feeling the stones to cross the river" is the true portrayal of the current 5G development.

The investment of China's three major operators in 5G is also less than expected, which to some extent illustrates this problem. The capital expenditure of the three major operators in the 5G year (2019) was 74 billion yuan less than the 4G year (2014) and 31 billion yuan less than the 3G year (2009), which reflects the cautious attitude of the three major operators in 5G investment.

       Wang Xiaochu, chairman of China Unicom, stated at the 2018 performance release conference, "We believe that this year is not the time for large-scale 5G investment. We should be more cautious and understand the 5G business model and its operational laws from an experimental perspective."

       To become a true leader in 5G, China must take the lead in finding future business prospects. Accelerating the research and development and integration of 5G technology, promoting the development and verification of business models, and achieving breakthroughs and implementation of practical applications are the three essentials for China's exploration of the future of 5G.

As for the fierce competition with other countries, this can be seen from a series of actions taken by the United States, South Korea, and other countries in the development of 5G—everyone is eyeing the future of 5G.

However, at present, China has not widened the gap with them in 5G development, and its leading position remains unstable.

If 5G is a long-distance race, then only a short time has passed since the starting gun was fired, and the real final round will be in the commercialization stage.

        China Zhongji Investment is closely following the 5G field, investing in investment opportunities in sub-sectors including base station upgrades, network construction, products and services, and terminal usage scenarios.

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