China's 5G rollout is in the lead ahead of other nations in the world. In fact, amid the COVID-19 outbreak in 2020, the world’s most populous country added more than 200 million 5G connections, taking its share of global 5G connections to 87%. This number is expected to hit 822 million by 2025, as per GSMA’s forecast.
Aggressive network rollout and a growing device ecosystem support the growth in 5G adoption in the Chinese region. Having said that, Chinese operators are known to have deployed around 600,000 new 5G base stations in 2020.
Unsurprisingly, the country has already built additional 28,000 5G base stations between Q1 and Q2 of 2021. According to the Ministry of Industry and Information Technology (MIIT), from 819,000 5G base stations in March, China has deployed 847,000 5G base stations by the end of June. With this positive trajectory, during MWC 2021, the chief expert of China Telecom stated that the number of 5G base stations in China will reach 1.7 million by the end of 2021.
This might sound like quite an aggressive number according to MIIT’s minister but with the recent 5G development initiatives by Chinese operators, doubling the number of 5G base stations in the next 6 months is likely to happen.
Chinese telecom carriers are making significant progress in constructing low-band 5G networks. Much of the attention is drawn to the 700MHz frequency which is part of the wider ultra-high frequency (UHF) band. This can improve connectivity in rural areas, thanks to its ability to support better coverage in open spaces. Moreover, with its wide territorial reach and good penetration in buildings, the 700MHz band base stations can accelerate meeting the consumer demands for broadband services over wireless networks.
Chinese carriers increase 5G activities in 700 MHz band
China Mobile, China Telecom, China Unicom, and China Broadcasting Network (CBN) have all contributed to the increase of 5G infrastructure, particularly in the 700 MHz band. At the top of the list is China Mobile and CBN’s move to deploy 400,000 700 MHz 5G base stations by year-end.
At the beginning of 2021, China Mobile and CBN had announced a 5G strategic cooperation agreement to construct and share a 700 MHz 5G network. The two telecom carriers have invested together in the new construction, expansion, and renovation to minimize infrastructure costs. As a combined effort, they purchased 480,400 700 MHz 5G base stations this year.
They have started the centralized procurement and bidding process for 700 MHz wireless network main equipment and multi-channel antenna products on June 25 and have also released the device requirements for 700 MHz 5G in March. CBN asserted that 400,000 5G base stations will be deployed in 2021 and nationwide coverage will be achieved in two years.
“So far, most of the 5G base stations in China are deployed in the 2.6 GHz or 3.5 GHz band. The 480,000 base stations in 700 MHz will be a significant boost to the 5G infrastructure market and will also be a catalyst for the 5G development in China,“ stated Guang Yang at Strategy Analytics in a study entitled ‘China's 5G base stations to double in 6 months?’
On the other hand, China Telecom and China Unicom jointly launched the centralized procurement of 242,000 5G base stations. On July 9, they released the announcement on public bidding involving the 2.1 GHz wireless primary device needed in the 5G SA construction project in 2021.
China’s 5G market in 2021: Domestic equipment vendors reap benefit
A total of 480,397 5G macro base stations in the 700 MHz band (under the render bid request of China Mobile and China Broadcasting Network) and 242,000 2.1 GHz based stations are going to be built in China this year. This will drive 5G investments in China in the second half of this year and benefit domestic equipment vendors like Huawei.
It is worthy to note that in China Mobile and CBN bidding, Huawei has won around 60% of the total share. This proves that Huawei, as the leading telecom equipment provider globally, will continue to be the main vendor beneficiary of 5G CAPEX spending in China.
“In 2020, the huge 5G investments of the Chinese operators boosted the performance of major infrastructure vendors, particularly the domestic vendors. As Huawei dominates China’s 5G market now and its products have advantages in terms of communication performance and physical factors such as weight and volume, it is expected that Huawei will continue to be the biggest winner in the Chinese market in 2021,” Guang added.
Without a doubt, 700 MHz 5G base station deployments would boost the overall Chinese 5G market this year. “700 MHz could be used to build a nationwide low-frequency 5G shared access network for rural areas and could be shared by the four telecoms firms to avoid duplication of construction,” Zhang Yunyong, a member of the National Committee of the Chinese People's Political Consultative Conference and general manager of China Unicom's product center proposed.
Judging from the centralized procurement projects launched, China's 5G network is sticking to its own plan and entering a period of large-scale construction. With the strength of wider coverage and low propagation loss, low-band 5G frequencies such as 700 MHz in combination with mid-band 2.1 GHz will enable a better 5G network experience. Furthermore, this will be beneficial to companies like Huawei in order to demonstrate the true value of 5G, which will keep boosting the confidence of clients in its business continuity under the current circumstances.
