China Broadcasting Corporation's 700MHz frequency migration bidding failed, and the road to 5G encountered another setback

The much anticipated China Radio and Television 700MHz frequency migration tender failed.

On July 2, China Radio and Television's 700MHz frequency migration bidding failed because the number of valid bidders was less than 3.

The frequency migration of China Radio and Television marks the official launch of the frequency clearance work, which is the only way for China Radio and Television to realize the official commercial use of 700MHz. Frequency clearance is a huge and complex task. Although the budget limit is 1.8 billion yuan, it is difficult to ensure the progress of 5G 700MHz network construction and operate it at the same time. With little money and much work, the failure of the bidding seems reasonable.

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For China Radio and Television, which was established less than 10 years ago, the failure of the bidding is actually nothing. After all, China Radio and Television has encountered many challenges in exploring the development of 5G.

A heavy 5G license

June 6, 2019, is a day that will go down in history for China Radio and Television. At 8:40 a.m., Zhao Jingchun, then chairman of China Radio and Television Network Co., Ltd., accepted the 5G commercial license issued by Miao Wei, then Minister of Industry and Information Technology, on behalf of China Radio and Television. China Radio and Television entered the 5G era side by side with the three major operators.

It is this 5G license that has put China Radio and Television at the forefront.

How could China Radio and Television, which was not a professional company, get a 5G commercial license? Many people were confused and puzzled at the time. If we want to trace the reason, it may be closely related to the 700MHz frequency band owned by China Radio and Television. In early 2016, the Party Committee Meeting of the State Administration of Radio, Film and Television clearly allocated the 700MHz frequency band to China Radio and Television, but it was only used for radio and television business; until the "Notice on Adjusting the Frequency Use Plan of the 700MHz Frequency Band" was issued, some of the spectrum resources originally used for radio and television business were re-planned for mobile communication systems, and the 700MHz frequency band really became an important factor in China Radio and Television's construction of 5G.

As we all know, the 700MHz band, known as the "golden frequency band", has excellent characteristics such as low frequency, wide coverage, low propagation loss, and strong penetration ability. It is suitable for large-scale continuous network coverage and can greatly save 5G construction costs. Therefore, the 700MHz band has become a hot existence in 5G construction. Compared with the other three major operators, although China Radio and Television's infrastructure is relatively lagging, this also adds many advantages to China Radio and Television's construction of 5G independent networking. In summary, China Radio and Television's 5G blueprint is not a "castle in the air".

Although China Radio and Television has obtained the 5G "entry ticket", it faces many challenges in its transformation from a content provider to a communications operator. Without long-term experience in mobile communications network planning and business model deployment, without professional communications talents and technologies, without sufficient funds, and with a fragmented industry structure, how can China Radio and Television build 5G?

A chance to turn things around

Back in 2014, China Radio and Television Corporation was born, but at that time it was only responsible for cable television network-related businesses nationwide. It was not until 2016, after being awarded the "Basic Telecommunications Business Operation License", that China Radio and Television Corporation became the "fourth largest operator" after China Telecom, China Mobile and China Unicom, and began to engage in domestic Internet data transmission business and domestic communication facilities service business.

However, compared with the three major operators with deep qualifications, rich experience and stronger professionalism, China Radio and Television, known as the "fourth largest operator", is obviously lacking in confidence. Whether it can use the 5G license to become a real operator is the most critical "turnaround opportunity" for China Radio and Television. With no money, no people, no foundation and no experience, China Radio and Television, which started from scratch, began to give it a try in the face of "being besieged on all sides".

If there is no one, then transfer someone. On January 15, 2020, China Radio and Television welcomed its first chairman of the communications department. Song Qizhu, former director and party secretary of the Hubei Provincial Communications Administration, succeeded Zhao Jingchun as chairman. Song Qizhu has served as deputy director of the National Radio Monitoring Center, deputy director of the Radio Management Bureau of the Ministry of Industry and Information Technology, director and party secretary of the Hubei Provincial Communications Administration. For China Radio and Television, which wants to transform into a telecommunications operator, Song Qizhu's arrival is undoubtedly "a timely help", and this adjustment is also regarded by the industry as a "big move" by China Radio and Television to accelerate 5G construction.

If you don't have money, then attract investment. The initial registered capital of China Radio and Television was only 4 billion yuan. At the unveiling ceremony of China Radio and Television Network Co., Ltd. in 2020, China Radio and Television signed a strategic cooperation agreement with State Grid and Alibaba. State Grid and Alibaba each invested 10 billion yuan in China Radio and Television Network Co., Ltd., each acquiring 9.88% of the shares. In addition to the capital injection from the parent company and the capital investment from non-radio and television companies such as State Grid Information and Communication and Jiuquan Iron and Steel, the registered capital of China Radio and Television Network Co., Ltd. has risen to 101.2 billion yuan.

If there is no network foundation, then accelerate integration and promote "one network nationwide". Previously, the state had clearly proposed to accelerate the integration of national cable TV networks and the integrated development of radio and television 5G construction. In response to the national call, China Radio and Television, together with provincial network companies and strategic investors, jointly initiated the establishment of China Radio and Television Network Co., Ltd., forming an operation and management system of "unified construction, unified management, unified standards, and unified brands", and launched the "one network nationwide" action.

If you have no experience, then join forces for win-win cooperation. On January 26, 2021, the long-discussed "marriage between China Mobile and China Broadcasting Corporation" was finally settled. China Mobile and China Broadcasting Corporation signed a "5G Strategic Cooperation Agreement" in Beijing, officially launching the joint construction and sharing of the 700MHz 5G network. On one side is a new operator with 700MHz "golden" spectrum resources, and on the other side is the world's largest mobile operator with strong financial resources, a large number of users, leading technology and rich experience. The two parties are the best partners of "strong resources + strong strength", and people also jokingly say that "China Broadcasting Corporation married China Mobile with the dowry of the 700MHz frequency band."

This cooperation model is a choice that maximizes benefits for both the "newcomer" radio and television and the "old hand" mobile. From a deeper level, the combination of China Mobile and China Radio and Television is not only the joint construction of the network, but also the integration of the business ecosystem, and the innovative creation of a new "network + content" ecosystem.

The “One National Network” that determines success or failure

If we want to widely integrate 5G networks into thousands of industries, we must ensure the smooth deployment of "One Network Nationwide". The first challenge that China Radio and Television faces when entering the communications field is how to integrate the fragmented industry structure into a group. Before the "One Network Nationwide" action was carried out, the external brands and images of cable TV network operators across the country were mostly based on themselves, and the corresponding company names, trademarks, business scopes, etc. were different. This is even more out of tune with the three major operators, and such development is extremely unfavorable for China Radio and Television to build a 5G network.

The importance of the "One Network Nationwide" campaign is no less important to China Radio and Television than 5G construction. Fortunately, the integration of the "One Network Nationwide" is currently being continuously promoted vertically. At the "2021 World Telecommunication and Information Society Day Conference", Liang Xiaotao, general manager of China Radio and Television, said that China Radio and Television had completed the integration of 24 provincial-level system radio and television network companies across the country on December 31, 2020. At the same time, since March this year, China Radio and Television has also started the renaming of 23 non-listed provincial subsidiaries, and 18 of them have completed the renaming.

However, the industry has not been optimistic about the advancement of China Radio and Television's "One Network Nationwide" work - the fragmented situation, coupled with the recent failure of the first bidding for the 700MHz frequency migration, has cast a shadow on the development prospects of "One Network Nationwide". Some experts believe that only by accelerating the pace of "One Network Nationwide" integration and breaking the bottleneck of the cable industry development can China Radio and Television truly transform from a traditional cable TV network operator to a communications operator.

However, it is gratifying that on July 1 this year, China Radio and Television officially changed its name to "China Radio and Television Network Group Co., Ltd." Although the "One Network for the Whole Country" has achieved certain results, it will take some time to realize the overall "One Network for the Whole Country". When the "One Network for the Whole Country" is truly realized, it will be the day when China Radio and Television truly transforms into a communications operator.

The "big cake" in the eyes of equipment manufacturers

China Radio and Television has made great efforts in 5G construction. Zeng Qingjun, deputy general manager of China Radio and Television, revealed that China Radio and Television plans to open 400,000 5G base stations in 2021 and 480,000 in the first half of 2022. In addition, China Radio and Television has jointly completed the overall construction principles and centralized procurement and testing of wireless side main equipment for the deployment of 400,000 700MHz 5G base stations within the year with China Mobile.

On June 25, 2021, the industry-discussed 700MHz equipment bidding was finally launched. Entrusted by China Radio and Television, the bidding was conducted by China Mobile on behalf of China Radio and Television and China Mobile, with a total of 480,397 5G 700MHz macro base stations to be purchased.

Such a large-scale equipment procurement has undoubtedly become a target for equipment manufacturers. Although there is a high probability that many companies will win the bid in this tender, gaining a larger market share is the ultimate pursuit of equipment manufacturers. The industry generally believes that Huawei, ZTE, Ericsson, and Nokia will all be strong competitors. Some experts predict that Huawei and ZTE may become the biggest winners, and Ericsson, Nokia, and China Information and Communications Technology may gain a smaller market share. Regardless of which companies win the bid, they will boost China Radio and Television's 5G construction. Whether 480,000 base stations can be opened as planned in the first half of 2022, equipment manufacturers play a vital role.

In addition to actively promoting 5G construction, China Radio and Television will also start issuing 192 number segments and launch special packages in due course, so that everyone can enjoy China Radio and Television's high-quality services as soon as possible. At the same time, China Radio and Television also pays more attention to creating a new 5G ecosystem, promoting the integration of 5G applications into thousands of industries, and actively exploring 5G technology to carry new information dissemination, cultural entertainment, smart radio and television, and new media, and promote the integrated development of traditional media and new media. Therefore, for equipment manufacturers and even the entire industry, China Radio and Television's "big cake" must not be missed.

There may be "variables" in co-construction and sharing

Different from the previous cooperation model, China Radio and Television and China Mobile have created a new cooperation model, that is, one party provides spectrum resources and the other party provides capital, each party takes what it needs and cooperates fairly. The cooperation agreement makes specific provisions for the joint construction of the 700MHz wireless network by both parties. New construction, expansion, and renovation shall be jointly invested by both parties in a 1:1 ratio. The 700MHz wireless network, as an indivisible whole asset, shall be owned by both parties in a 1:1 share; both parties have the right to fully use the 700MHz wireless network to provide services to their respective customers; both parties shall serve as project construction units of the 700MHz wireless network and perform their own construction procedures. After such a detailed agreement was finalized, the industry generally believed that the joint construction of 700MHz by "Telecom" seemed unrealistic.

However, some experts believe that in recent years, through the early pilot projects of the tower company model and the "Dianlian" cooperation model, it is no longer a problem for multiple operators to carry out various types of co-construction and sharing. At the same time, all-network terminals have become the mainstream in the industry, which can also break the frequency bottleneck between operators. The expert believes that it is not a "pipe dream" for "Dianlian" to join the 700MHz sharing.

The 700HMz frequency band held by China Radio and Television has always been a popular choice in the industry. Even though China Radio and Television has signed a cooperation agreement on co-construction and sharing with China Mobile, news of the four companies sharing the frequency band is still circulating in the market.

Wang Xiaochu, Chairman of China Unicom, said at the China Unicom 2020 Annual Performance Conference that the co-construction and sharing of the 700MHz frequency is an opportunity for the four telecom operators. Zhang Yunyong, member of the National Committee of the Chinese People's Political Consultative Conference and general manager of China Unicom's Product Center, also proposed a proposal during this year's two sessions, suggesting that the "digital village" mobile communication infrastructure and 700MHz spectrum resources be positioned as basic public resources covering all mobile communication users, including the rural population. Therefore, rumors about the four operators co-building and sharing the 700MHz frequency band have not stopped.

Whether China Telecom can join the 700MHz frequency band sharing in the future remains to be seen. Whether it is shared by two or four operators, there are still many practical difficulties that need to be solved one by one. Even if there will be policy adjustments in the future, for China Radio and Television, it is down-to-earth and based on the present to build a 5G network with stable signals and convenient and easy-to-use is the most important goal at present.

The breakthrough of the “fourth largest operator”

"The 5G license is not only issued to China Radio and Television, but also a qualification for the entire radio and television industry. Differentiated competition is not only about differentiated development among enterprises, but also a new exploration of how the radio and television industry can use mobile communications and existing cable and wireless television to achieve the integration of 'media + network'." Zeng Qingjun said at the "700MHz Technology and Industry Application Seminar". China Radio and Television, which originated from content production, has explored the breakthrough point of differentiated development from the other three major operators from a technical perspective - 5G NR broadcasting.

China's top radio and television executives have also publicly stated many times that they will vigorously develop 5G NR broadcasting. Some experts say that 5G NR broadcasting will help promote the in-depth development of media integration, and integrate broadcasting and television services into different scenarios in thousands of industries such as public safety, emergency communications, epidemic prevention and disaster relief, industrial Internet, and Internet of Things. However, from the current perspective, the progress of 5G NR broadcasting is not satisfactory.

As of December 2020, the number of Internet users in my country has reached 989 million, and the proportion of Internet users using mobile phones to access the Internet is as high as 99.7%. In addition, in the era of short videos, the Internet industry has launched audio-visual products such as OTT TV, short videos, and online videos, attracting a large number of users. At the same time, the three major telecom operators have also vigorously promoted IPTV into thousands of households with the help of their own broadband network foundation and number of users. These are no small challenges for the development of 5G NR broadcasting. The advantages of 5G NR broadcasting are unique to China Radio and Television. The success or failure of 5G NR broadcasting depends on how China Radio and Television positions 5G broadcasting, how to find a feasible commercial model, seize the opportunity, and pave the way further.

This year is the first year of the 14th Five-Year Plan, and it is also the starting year for China Radio and Television's large-scale 5G construction and application. Only by accelerating the completion of the frequency clearance task and promoting the "One Network Nationwide" action can the competitiveness of the 5G network with radio and television characteristics in the new industry development period be fundamentally improved. It is also hoped that China Radio and Television will be like what Song Qizhu said, "This year, China Radio and Television will seize the opportunity and fight for the integration of the "One Network Nationwide" and the integrated construction and development of radio and television 5G. China Radio and Television will build a safe, reliable, green, trustworthy, agile and intelligent 5G network with a high starting point and high standards."