Talk about the other side of 5G that you don’t know

At present, domestic policies mainly revolve around the construction and application of 5G. The Ministry of Industry and Information Technology has issued the "Action Plan for the Development of Basic Electronic Components Industry (2021-2023)", which puts forward requirements for breakthroughs in the basic electronic components industry of 5G-related equipment to ensure the stability of the industrial chain. The Ministry of Commerce has issued the "Notice on Accelerating the Construction of Digital Commerce and Serving the Construction of a New Development Pattern", which promotes enterprises to further apply 5G technology in policies and help the development of the digital economy. Abroad, 5G development remains a focus of policy attention in various countries. All countries are increasing their investment in 5G, including increasing investment and increasing spectrum supply. Among them, Brazilian regulators announced that they would not exclude Huawei and ZTE, which is good news for Chinese communications companies. Deutsche Telekom launched a 5G independent networking experiment, marking that Germany is moving towards full independent networking.

The great development of the global communications industry in 2020 has further drawn people's attention to the important value of this new technology. According to Dell'Oro's latest report, the global wireless access market revenue set a new record in 2020, which is undoubtedly the result of large-scale 5G construction. Omedia has paid attention to the damage to the market caused by the US "Clean Network" plan. The report pointed out that the epidemic in 2020 has further highlighted the value of fiber optic frames and consumer demand has continued to rise; but the "Clean Network" plan is splitting this market, which may cause instability in the supply chain and damage the industry's long-term market prospects.

Changes in the communications markets in Malaysia and India. From the data analysis, the Malaysian communications market has withstood the test of the COVID-19 pandemic and is still advancing the migration of new technologies. The country is already ready to welcome 5G to a certain extent. The Indian communications market was also generally stable in 2020, but its penetration rates in the mobile and fixed markets were still at a low level, hindering further expansion. From the technical structure analysis of mobile and fixed services, the expansion of India's 4G share depends largely on the cheap network developed by Jio, and its infrastructure still needs to be improved. Therefore, it is difficult for India to deploy 5G in the short term.

In the second half of 2020, the industry performance of Malaysia and India diverged significantly. The performance of Malaysia's communications industry experienced the impact of the epidemic and showed a more obvious decline in the second quarter. Its ARPU generally fell first and then rose, maintaining above US$10; EBITDA declined overall, and some operators such as Celcom Malaysia even saw a sharp decline of 22.7%. India's industry performance continued to rise, with ARPU rising to US$1.8 in the third quarter. At the same time, the EBITDA of major operators also rose sharply. In addition to the scale effect of the Indian market, exchange rate factors and cost control of major operators are the reasons for the rapid growth of revenue in the Indian market.

After Biden took office, the recent Sino-US technology game has eased slightly, but friction at the trade level continues. Since January, the US International Trade Commission has announced a number of cases related to the communications industry. Among them, the ITC officially launched a 337 investigation into UMTS and LTE cellular communication modules and their products, and the defendants include a Chinese company. In addition, a patent war broke out again between Ericsson and Samsung. The patents involved are all basic patents in the communications industry, which deserve the attention of Chinese companies.

The risks in the communications market need to be focused on: First, the so-called "Clean Network" plan of the United States is still being promoted. These political measures will have a negative impact on the development of the global communications industry. Second, in 2021, the risk of the global COVID-19 pandemic may gradually be released, and some countries are preparing to expand investment and deploy 5G networks. However, the cost of 5G deployment is huge, and it is expected that it may bring new risks to operators in various countries.