China Telecom responds to "chip shortage": there is a plan and it will not affect 5G deployment

Yesterday, China Telecom announced its full-year results for 2020. During the reporting period, the company achieved operating revenue of RMB 393.6 billion, a year-on-year increase of 4.7%; service revenue of RMB 373.8 billion, a year-on-year increase of 4.5%, of which mobile service revenue was RMB 181.7 billion, a year-on-year increase of 3.5%; fixed-line service revenue was RMB 192.1 billion, a year-on-year increase of 5.5%; and net profit was RMB 20.9 billion, a year-on-year increase of 1.6%.

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In the face of the current "chip shortage" problem, Liu Guiqing, deputy general manager of China Telecom, said at the performance briefing that China Telecom has been communicating closely with upstream and downstream companies. "We have close interactions with manufacturers in terms of the entire chip reserve and the security of the industrial chain of related chips, and we have some very good plans. From the current situation, the chips related to the entire 5G network equipment and the chips required for 5G mobile phones in 2021 will not be affected. Investors have no need to worry about 5G equipment in 2021, which will not be affected by the so-called chip shortage. We are still confident that we can complete the construction tasks on schedule."

It is reported that in 2021, China Telecom plans to spend RMB 39.7 billion on 5G-related capital expenditures, with the goal of opening 700,000 5G base stations by the end of 2021 and building 320,000 new 5G base stations throughout the year (China Telecom is responsible for building 180,000 new base stations), with the goal of expanding 5G network coverage to all county towns and some townships.

In addition, China Telecom emphasized that it will deploy 5G networks on demand in 2021, use 3.5GHz to expand capacity in medium and high traffic areas, use 2.1GHz to achieve wide coverage in county towns and some townships, and promote co-construction and sharing across the industry in rural areas, railways, and highways.

Liu Guiqing said: "China Telecom's 5G construction in 2020 mainly uses 3.5GHz equipment. Currently, the 2.1GHz frequency has been re-cultivated as the 5G frequency. In towns and counties, 5G traffic is relatively small, and coverage with 2.1GHz equipment will account for the vast majority. Both investment and operating costs such as electricity charges will be significantly reduced, which will better improve the input-output of 5G construction."