How much money has 5G burned? The accounts of the three major operators are all here

In 2020, the country's top leadership has clarified the new infrastructure strategy, and informatization has fortunately become a work focus. The three major operators represented by China Unicom have followed the regulatory guidelines and increased their efforts in 5G network construction. So how much did the operators spend on 5G network construction in 2020? What are the trends in the investment plan for 5G network construction in the future?

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1. China Unicom's 5G capital expenditure in 2020 is 34 billion yuan

In its annual financial report released in early March, China Unicom stated that its 5G expenditures in 2020 were about 34 billion yuan. China Unicom said that by jointly building and sharing 5G networks with China Telecom, the total number of 5G base stations has reached 380,000, which is the first time in history that the coverage scale has been basically equivalent to that of the leading operators.

As for how much money China Unicom and China Telecom have saved through co-construction and sharing, which is of particular concern to everyone, clear data is now available. China Unicom said that co-construction and sharing has saved both companies more than 76 billion yuan in network construction costs, significantly reduced network operating costs, and greatly shortened the network construction cycle.

China Unicom expects capital expenditures of 70 billion yuan in 2021, of which 5G expenditures are about 35 billion yuan. It plans to add 320,000 5G base stations and eventually achieve the construction goal of 700,000 available 5G base stations by the end of 2021. Here we remind everyone that China Unicom's construction target for 2021 is lower than the number of construction and commissioning in 2020.

Regarding the future 5G network construction investment plan, China Unicom’s senior management stated that the peak of 5G capital expenditure will be mainly concentrated between 2020 and 2022. During these three years, China Unicom’s annual expenditure plan will be around 70 billion yuan, of which 5G investment will account for around 35 billion yuan. After three years, 5G investment will begin to decline.

2. China Telecom's 5G capital expenditure in 2020 is 39.2 billion yuan

China Telecom's 2020 financial report data shows that its capital expenditure for the whole year of 2020 was RMB 84.8 billion, of which RMB 39.2 billion was used for 5G network construction. Through joint construction and sharing with China Unicom, China Telecom's total number of 5G base stations has reached 380,000 by the end of 2020.

China Telecom announced a capital expenditure plan of 87 billion yuan for 2021, of which 45.6% will be used for 5G, roughly estimated at about 39.7 billion yuan. It plans to build 320,000 new 5G base stations (co-built and shared), of which China Telecom will build about 180,000 5G base stations itself, which means that China Unicom will use about 35 billion yuan to build 140,000 base stations.

China Telecom and China Unicom's capital expenditure on 5G network construction in 2020 totaled 73.2 billion yuan. According to their 5G capital expenditure plans for 2021, China Telecom and China Unicom will spend a total of 74.7 billion yuan, but only 320,000 new 5G base stations will be built. Please note that the two companies have planned large investments but few base stations.

If we follow the judgment of China Unicom’s senior management on the 5G network construction cycle, then China Telecom’s investment in 5G network construction in the next three years (including 2021) will be approximately 119 billion yuan, and the total number of 5G base stations jointly built and shared within the final three years will be approximately 1.2 million.

3. China Mobile's 5G capital expenditure in 2020 is about 100 billion yuan

As of March 24, China Mobile has not yet released its 2020 annual operating report. We are still uncertain about the specific amount of China Mobile's capital expenditure for 5G network construction in 2020. However, according to China Mobile's value concept of "network is the lifeline of communications companies", its investment scale is likely to be higher than the sum of its competitors.

Here we need to remind you of a very interesting phenomenon. China Mobile invested about 100 billion yuan and built 390,000 5G base stations; China Unicom and China Telecom jointly built and shared 73.2 billion yuan and built 380,000 5G base stations. What expenses did China Unicom and China Telecom save by jointly building and sharing?

At present, we have not yet found out from public channels China Mobile's 5G network construction capital expenditure plan for 2021. However, according to the goal of building 600,000 new 5G base stations in 2021 announced by the Ministry of Industry and Information Technology, China Mobile will build at least 280,000 5G base stations, which is likely to exceed the total number of joint construction by friendly companies.

If we extrapolate based on the capital expenditure scale in 2020, then in the next three years, China Mobile's total capital expenditure for 5G network construction will reach 300 billion yuan, and the total number of 5G base stations built will be about 1.2 million. In addition, considering the 5G network construction agreement between China Mobile and China Broadcasting Corporation, the scale of construction may be even larger.

4. Are 2.4 million 5G base stations enough?

According to the future 5G network construction plans announced by China Unicom and China Telecom, as well as the estimated 5G network construction plan of China Mobile, by the end of 2023, the total number of 5G base stations in my country will reach 2.4 million. Although this scale will undoubtedly become the first in the world, is it enough?

Information obtained from public channels shows that the total number of base stations in my country has reached 9.31 million, of which the total number of 4G base stations has reached 5.75 million. It has been 7 years since 4G was officially licensed for commercial use in early December 2013. Considering that 5G will be licensed for commercial use in 3 and a half years from the beginning of June 2019 to the end of 2023, 2.4 million base stations are not too many.

Although 5G is mainly used in the government and enterprise markets, and although operators have established a network construction strategy for the long-term coexistence of 4G+5G, from the perspective of the majority of users, higher-performance 5G networks naturally require more 5G base stations to support them. Otherwise, how can the characteristics of big video, large traffic, and low latency be brought into play?

At present, there is a heated debate on the Internet about whether 5G networks are being built ahead of time. Some people analyze it from the perspective of science and technology, some from the perspective of investment returns, and some from the perspective of whether the company can continue to develop. As long as everyone's position is different, there will naturally be great differences in opinions. If we only look at it from the perspective that 5G can empower thousands of industries, even if there is a trend of 5G network being built ahead of time, it should be supported!