It will take time for operators to promote 5G test equipment vendors to benefit
China Securities Journal
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â–¡ reporter Liu Yang
The 5G test team jointly established by China Mobile Research Institute, Beijing Mobile and Datang Telecom Group was established recently. According to China Mobile's plan, in 2017, 5G trials were launched in five cities including Beijing, Shanghai, Guangzhou, Suzhou and Ningbo to promote the mature platform architecture and verify the key performance of the 3.5GHz network.
Analysts pointed out that the above-mentioned three parties will help to effectively integrate China Mobile Research Institute's innovation and industrial traction capabilities, Datang's technology and industrialization capabilities, and Beijing Mobile's first-line experience. However, 5G development is still in the technical trial stage, and the official commercialization will be as short as 2019. The short-term benefits of communication equipment vendors are limited.
Deploy 5G pilot
Among the three major operators, China Mobile's 5G trials and trial commercials are progressing relatively faster. Li Yue, president of China Mobile, said that China Mobile plans to start 5G scale test in 2018, pre-commercially in 2019, and officially commercialized in 2020.
Specifically, in 2017, China Mobile will select 4-5 cities, each city will build about 7 sites; in 2018, 5G scale testing will be started, and each city will build about 20 sites for testing; in 2019, continue to expand the trial. Net scale; in 2020, it will be officially commercialized and more than 10,000 5G base stations will be built.
China Unicom and China Telecom also began deploying 5G pilots in the second half of this year. Among them, China Unicom plans to conduct capacity and performance tests in six cities from 2017 to 1919, and build about 1,000 sites before commercial use in 2020. China Telecom plans to conduct field trials in Beijing, Guangzhou, Shanghai and other places, and Xiong'an New District enters the list of its test areas.
With the deployment of the 5G pilots of the three major operators, the number of companies participating in the 5G test and testing is increasing. According to the China Securities Journal reporter, mainstream system manufacturers such as Datang, ZTE, Nokia Siemens, Huawei, and terminal chip companies such as Lianxin and Spreadtrum are actively participating in the 5G test.
ZTE revealed in the conference call on July 10 that the construction of 5G standards is accelerating. The company is conducting technical tests, actively participating in 5G standards and related tests, and actively investing in R&D of 5G related products and technologies to promote 5G technology as soon as possible. Commercial.
Tongyu Communication’s Board of Directors said that the company has developed in-depth R&D cooperation with world-renowned equipment manufacturers, and some new products have started 5G commercial testing. "In the 5G era, antennas, filters and RRUs will be highly integrated. Equipment manufacturers need to cooperate deeply with professional manufacturers who master antenna and filter core technologies. The company has accumulated technology in antenna and filter integration, and will fully utilize technology and cost. Advantages in control, supply chain and quality control."
At present, the 5G standard has not yet been officially released. “In June 2018, after the 5G core standard was frozen, operators will be small-scale commercial.†Xia Yusheng, an analyst at Communications Securities, told China Securities Journal, “The International Telecommunication Union (ITU) will only be in December 2019. Freezing the 5G standard. Global licensing in 2020 is a high probability event, when large-scale commercialization will begin."
Large market space
“Compared with 4G construction, 5G base stations will adopt new equipment.†CITIC Jianping analyst Yu Haining told China Securities Journal that “especially the application of Massive MIMO technology can greatly improve transmission efficiency; Beamforming (directional emission) technology can be used to improve signal strength and improve signal quality.
China Mobile has publicly stated that it will be the first to deploy large-scale antenna technology in 4G networks to enhance the user experience.
"Everyone is paying more attention to the wireless base station side. In fact, the 5G standard is on the core network side, and software-defined network (SDN)/network function virtualization (NFV) needs to be introduced. The network architecture is different from that of 4G." Yu Haining said .
According to the "5G Economic and Social Impact White Paper" issued by China Information and Communication Research Institute, by 2030, the total output directly driven by 5G will reach 6.3 trillion yuan, and the indirect total output will be 10.6 trillion yuan. It is 29% and 24%. The key dynamics are changing as the commercialization process progresses. The three major operators will invest nearly 180 billion yuan in 5G infrastructure in the next seven years, far exceeding the investment in the 4G era.
Regarding the investment opportunities of the 5G upstream and downstream industry chain, from the point of view of commercialization from 2020, Cinda Securities believes that the first benefit is upstream component manufacturers, followed by system integrators, followed by downstream operators and terminal equipment. Business. Optimistic about the front-end unit has a technical moat sub-industry: the base station antenna field can focus on Tongyu Communication, Shenglu Communication, Yitong Century and Sitron Electronics; the RF device field can focus on Wuhan Fangu, Sanan Optoelectronics, Dafu Technology and Chunxing Seiko and so on.
“By 5G commercial, the bandwidth cost will decrease.†Xia Yusheng said, “The operator’s investment capital will not increase significantly compared to 4G and 3G. This will drive the investment to the network cloud back-end equipment.â€
Short-term benefits are limited
A number of industry insiders told China Securities Journal that 5G is still in the experimental stage. The communication operators are only setting up a test environment. The formed communication equipment is still in the experimental stage. There is still a long way to go before the formal commercial use. It is too early for equipment manufacturers to benefit.
From the current situation, Huawei is in a leading position in the field of communication equipment vendors, and ZTE also has an important market share.
“When the global license is issued in 2020 and operators start mass commercialization, equipment manufacturers will benefit.†Xia Yusheng told China Securities Journal, “In June 2018, after the 5G core standard was frozen, the operators would start small. Scale trial commercial. From the timetable of China Mobile's 5G construction plan, the large-scale network test of the domestic 5G market is expected to be in 2018. China Mobile announced commercial trials in 2019, commercialization in 2020, and construction scale of 10,000 5G base stations. But for communication equipment vendors, the current increase is limited."
“5G experimental terminal equipment is still under development.†Chinese Academy of Engineering academician He Hezhen said, “The 5G test site set up in the suburbs of Beijing is doing some small tests. Since the national standard has not been launched, there is no way to commercialize it. 5G will gradually follow the global standardization process. Advance."
Listed companies, operators and mobile phone manufacturers usually plan ahead in order to obtain first-mover advantage. "The 5G standard has not yet been formulated, but companies are rushing to run. The standard is more a product of negotiation and compromise. Some manufacturers may launch mobile phone products supporting 5G technology next year," said senior telecom analyst Ma Jihua.
The management of Tongyu Communications believes that the transition period from 4G to 5G from 2016 to 2018 will have pressure on the growth of antenna revenue, and integration is the development trend of the industry. Subsequent equipment manufacturers may increase cooperation with antenna manufacturers.
Cinda Securities expects that with the advent of the 5G era, the focus of mobile communications will shift to East Asia. From the perspective of commercialization, the 2018 PyeongChang Winter Olympics, the 2020 Tokyo Olympics, and the 2022 Beijing Winter Olympics will greatly accelerate the 5G network and large-scale commercial use.
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