The Ministry of Industry and Information Technology plans to speed up the network. How far are we from 5G and Gigabit?

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On January 17, the Ministry of Industry and Information Technology announced on its website that it had recently formulated and issued the "Information and Communication Industry Development Plan (2016-2020)". The plan states that by 2020, China will basically complete the optical network transformation of old residential areas, achieve optical network coverage in urban areas, and provide access service capabilities of more than 1000 Mbps (megabits per second).

Coincidentally, the United States has also made some moves in network transformation recently. AT&T, one of the largest operators in the United States, said in its latest official announcement that it had officially shut down its 2G data network service on January 1, 2017, which provided more convenience for the deployment of 5G network services.

Although my country's Internet has been developing rapidly in recent years, its Internet speed has always been criticized. Although Internet speed has improved, it is still not satisfactory, which is mainly caused by the monopoly mechanism of operators. The phenomenon of "slow Internet speed and high fees" also involves technical, economic and cultural factors.

Under such circumstances, what are the chances of realizing the plan proposed by the Ministry of Industry and Information Technology? The US operators have already shut down 2G data network services ahead of China. After all, China is still some distance away from 1000Mbps and 5G. To shorten this distance, some measures need to be taken based on the current situation, so that China can truly achieve the goal of becoming a "network power."

1. China's Internet speed development is subject to monopoly, and the factors causing "slow Internet speed and high fees" are complex

There have been many profound analyses and comments on the monopoly issue in various media. For example, after Premier Li Keqiang proposed "speeding up and reducing fees" in March 2015 to address the problem of "slow Internet speed and high fees", whether the operators have really implemented it has been a focus of debate. It is indeed difficult to choose between the profit pie and users, so it is normal to have pain and bargaining. But in the final analysis, it is still monopoly that causes all the problems.

Why is it difficult to solve the problem of operator monopoly in China? This is a rather grand topic, and it would be too complicated to discuss it in detail. We can start with the most realistic problem of "slow Internet speed and high fees", which is caused by extremely complex factors and involves many aspects.

On the surface, this is caused by the monopoly of operators. However, if the profits are fixed, operators can get more profits if they can reduce costs. However, it is very difficult for them to achieve this.

From an economic perspective, cost optimization is difficult to implement.

For companies like China Mobile, China Unicom, and China Telecom, the main cost comes from personnel. Saving costs may seem simple, but now that deep learning technology has advanced rapidly, it is not difficult to improve network speed and save labor costs by developing a few powerful algorithms and automating some processes.

But the question is, how to place the laid-off workers? This involves the "iron rice bowl" problem that has always existed in China. As part of the country's public functions, state-owned enterprises not only need to provide telecommunications services, but also need to bear social responsibilities.

On the one hand, the increase in Internet speed can improve the work efficiency of the whole society, but on the other hand, saving labor costs will increase management risks. As a state-owned enterprise, if the tolerance of social employment indicators is weakened, it is easy to cause more serious social problems.

This is a phenomenon worth pondering. If a startup with low coupling encounters this problem, it is absolutely stress-free to optimize. However, in a system with complex relationships, many seemingly simple optimizations are difficult to implement. This is like "not curing a serious illness" because it is very likely to involve more chronic diseases.

From a cultural perspective, the existence of the "iron rice bowl" has its own rationality.

According to Darwin's view, social parasites should be eliminated, which is the law of nature. But the fact is that many people who have no ability to create value can still hold the so-called "iron rice bowl" and be proud of it. This seems to be unfair to the diligent and enterprising people, and it violates the law of natural selection.

But from the perspective of cultural development and evolution, this phenomenon may be a means of "maintaining stability."

As our civilization has developed to this day, out of the incentive for adventure and innovation, a mechanism of "equality for all" has been created at a basic level, ensuring that everyone gets the most basic rights and respect. However, on the one hand, the equality mechanism allows individual potential to be maximized and promotes the growth of overall social productivity. On the other hand, it also makes diligent people more diligent and lazy people more lazy.

"Polarization" is the factor that most easily affects social stability, and the "iron rice bowl" mechanism just compensates for this. From a deeper perspective, the country and society always prefer to choose "maintaining stability" over "development", which is a compromise with culture.

It can be seen that the reasons behind the phenomenon of "slow Internet speed and high charges" are complex and difficult to change in the short term. Therefore, it may not be so easy to achieve 1000Mbps in 2020.

2. 5G network deserves attention, as many technologies involved are not easy to implement

US operators have already shut down 2G data network services so that they can better lay out 5G networks. If China wants to achieve the goal of becoming a "network power", the construction of 5G networks is also essential, because the application scenarios of 5G networks have a great impact on future industry and market development.

Before the emergence of 5G, the application scenarios of mobile communication systems were mainly wide-area continuous coverage and high capacity in hot spots. After the emergence of 5G, two scenarios were introduced: low latency and high reliability, and low power consumption and large connections.

Currently, the round-trip delay of 4G networks is 15ms, which can support most services. However, with the gradual development of technology, many emerging devices require lower delays. Low latency and high reliability can better serve scenarios with high requirements for accuracy and real-time performance, such as emerging technologies such as cloud computing and wearable devices.

With the advent of 5G networks, the energy consumption of communications should gradually decrease. However, compared with 4G, the user data rate of 5G needs to be increased by 100 times. This requires that in 5G, the transmission energy consumption per bit of information needs to be reduced by at least 100 times, which requires improving energy utilization. Low-power large connections can be applied to technologies that are sensitive to energy consumption and have a large number of devices, such as terminal direct connection and the Internet of Things.

However, the transition from 4G to 5G requires a continuous evolution process, during which the standardization progress needs to be gradually standardized and the new spectrum needs to be allocated.

In addition, the construction of 5G networks involves many advanced and complex technologies such as millimeter wave communication, large-scale MIMO, dense networking, heterogeneous networks, and visible light communication. It requires a lot of time, energy, money, and technical costs to achieve. Judging from the current situation in China, it is still difficult to achieve the popularization of 5G networks.

3. China is still far from becoming a “cyber power”, and other countries’ experiences may be a good reference

According to the 2016 Q2 Global Internet Speed ​​Report released by CDN service provider Akamai, the global average speed is 6.1 Mbps, and the average peak speed is 36.0 Mbps. South Korea's average speed is 27.0 Mbps, with a peak speed of 110.1 Mbps, which is at the forefront of the world. China's average speed is 5.2 Mbps, with a peak speed of 35.4 Mbps, which lags behind the global average.

However, according to the 38th "Statistical Report on the Development of China's Internet" released by CNNIC (China Internet Network Information Center), as of last year, the number of Internet users in my country had reached 710 million, and the Internet penetration rate reached 51.7%, exceeding the global average by 3.1 percentage points and the Asian average by 8.1 percentage points.

As communication technology becomes more mature, people have higher and higher requirements for the Internet. The Ministry of Industry and Information Technology issued the "Information and Communication Industry Development Plan" and the "Internet of Things Volume" at the same time, which well responded to the public's needs at the policy level.

However, due to many reasons such as technology, economy, and culture, this road is not easy to follow. On the road to becoming a "cyber power", South Korea's successful experience may be a reference for us.

In fact, the situation in South Korea and China is similar. The communication network field was also in a monopoly at the beginning. At that time, the state-owned enterprise Korea Telecom controlled ISDN and monopolized the network access and fixed-line markets.

In 1999, HANARO Telecom, one of the largest broadband Internet access providers in South Korea, launched an ADSL transmission mode with a speed of up to 1Mbps, which was much higher than the 128Kbps ISDN mode that Korea Telecom had at the time.

Subsequently, HANARO launched a monthly ADSL service for 28,000 won (equivalent to RMB 170), which prompted Korea Telecom to abandon ISDN and launch ADSL services, which caused a sensation across the country. Since then, Korea has broken the monopoly of the telecommunications market and entered the era of the Internet revolution, thus laying the foundation for it to become an IT powerhouse.

Comparing the development of the Internet in South Korea, we can find that the main reason for the slow development of China's Internet speed is the lack of an effective competition mechanism, which is caused by the serious monopoly. In addition to the deep-seated reasons, the mutual transfer of senior executives of the three major operators is also one of the factors leading to the monopoly.

Under this mechanism, executives lack the motivation to break down barriers. This is consistent with the view put forward by Professor Dan Breznitz of Georgia Institute of Technology in his book Run of the Red Queen: executives lack the motivation to invest in the current company to gain market dominance when they are transferred to other companies with competitors. The lack of an effective competition mechanism has kept China's Internet speed at an unsatisfactory level.

Facing the problems in China's communication network market, we need the country's macro-control and the self-awakening of enterprises. Of course, this will be a long process of continuous evolution. In general, breaking the monopoly is not easy, but there is hope after all.