5G "new infrastructure", new scenarios, new models

Since the beginning of the year, the central government has issued intensive policies related to new infrastructure such as 5G, and a wave of "new infrastructure" construction has been set off across the country, and 5G has entered a stage of accelerated development. As the first of the "new infrastructure", 5G is also a strategic infrastructure for high-quality economic and social development. Under a good policy development environment, 5G will accelerate the digital transformation process of all walks of life and give birth to more new application scenarios, new construction models and new business models.

1. New application scenarios

Since the official commercialization of 5G, the breadth and innovation of 5G applications in my country have continued to improve. 5G has been integrated and innovated with technologies such as big data, the Internet of Things, and artificial intelligence. Traditional industries have accelerated their integration with 5G, and new products and new formats have continued to emerge. 5G applications are evolving towards systematic application scenarios and industrial ecology, strongly supporting industrial transformation and upgrading and high-quality economic and social development.

5G+AICDE achieves integrated innovation. Operators are the main providers of 5G construction, operation and services. They will accelerate the deep integration and system innovation of 5G with emerging information technologies such as artificial intelligence, Internet of Things, cloud computing, big data, and edge computing, give full play to the multiplier effect, build a new infrastructure centered on 5G, build connection and intelligent computing integration service capabilities, industrial Internet of Things private network slicing service capabilities, one-stop cloud-network integration service capabilities, secure and reliable big data service capabilities, and telecom-grade edge cloud service capabilities, strengthen the full-chain capabilities of "cloud, network, edge, and terminal", support 5G application innovation in various fields of vertical industries, serve thousands of industries through the intelligent connection of all things and the convergence of data, and help build a smart society.

5G is deeply integrated with vertical industries. All parties in the 5G industry chain are actively carrying out 5G application innovation and pilot demonstrations in the fields of industrial Internet, telemedicine, smart education, smart transportation, smart agriculture, smart logistics, etc., promoting the application and empowerment of 5G in a wider range and more fields. Operators are accelerating the creation of a 5G product system and industry-wide solutions of "connection + slicing + platform + application" to provide customized 5G services for all walks of life. Large Internet companies, public service departments, industrial manufacturing and automobile manufacturing companies are actively deploying 5G applications. Baidu cooperates with operators in the fields of 5G driverless driving and AI; Tencent conducts cloud gaming, Internet of Vehicles, industrial Internet and other businesses based on 5G networks; State Grid and China Southern Power Grid cooperate with operators to carry out distribution network differential protection and intelligent inspection services based on 5G technology; automobile manufacturers such as SAIC Group and operators carry out cross-border cooperation in the field of Internet of Vehicles to jointly promote the maturity of the Internet of Vehicles industry ecosystem.

2. New Construction Method

Large-scale deployment of 5G requires innovative construction models, strengthening overall planning and intensive deployment, avoiding duplication and disorderly construction, minimizing construction costs, and achieving high-quality development of 5G networks. Operators are actively exploring new 5G network construction models, taking co-construction and sharing as the basic idea, and macro-micro collaboration as the networking architecture, actively carrying out 5G industry-specific network construction, and accelerating the creation of a new foundation for the digital economy.

Macro-micro collaboration is the basic architecture of 5G networks. Micro-station equipment has the advantages of small size, easy installation, low cost, and high energy efficiency. In order to solve the huge demand for 5G base stations, the high cost of macro stations and the difficulty of carrier expansion, and the inability of traditional indoor distribution systems to support 5G frequencies, micro stations have become an important deployment method for 5G networks. The use of macro-micro collaboration to build a multi-level, three-dimensional, and fully covered network is the basic architecture for the long-term evolution of 5G. Macro stations are mainly used to achieve wide-area coverage. Micro stations are mainly deployed in various indoor and outdoor scenes such as commercial areas, scenic spots, industrial parks, and transportation hubs. They are generally attached to public service facilities and buildings by hanging poles, hanging walls, and ceilings, and meet the needs of deep coverage and hotspot capacity at low cost. Due to the difficulty of unified planning and optimization of macro and micro, the deployment of 5G base stations by operators basically continues the rhythm of "macro stations first, micro stations later". The initial large-scale deployment of 5G is mainly based on macro station construction. As the preferred carrier for the deployment of 5G micro base stations, poles are highly valued at the policy level. Government departments in Guangdong, Tianjin, Fujian and other places have successively issued policies to promote the construction of smart poles. 23 regions across the country have carried out pilot projects of smart light poles with 5G pole stations. In the future, value-added services and vertical industry applications will be important directions for the development of 5G micro base stations. With the gradual maturity of 5G application scenarios and business models, the deployment of 5G micro base stations will usher in an explosive period.

Co-construction and sharing are the main themes of 5G construction. Due to the high frequency and ultra-dense networking of 5G, there is a huge demand for 5G base stations. In the absence of mature 5G technical standards and business models, huge construction costs and investment pressures have become important challenges facing 5G construction. In order to solve the problem of large investment in 5G construction, co-construction and sharing have become a feasible path and an inevitable choice. The Ministry of Industry and Information Technology, the State-owned Assets Supervision and Administration Commission and other ministries and commissions support the co-construction and sharing of 5G networks, guide operators to deepen the co-construction and sharing of communication facilities, strengthen the overall planning of site resources, and clearly propose to promote the opening and sharing of social pole resources and public service facilities such as municipal administration, transportation, and electricity to 5G base stations. China Telecom and China Unicom actively practice 5G co-construction and sharing. The two parties have jointly built a 5G access network in their respective areas and shared frequency resources with a bandwidth of 200MHz. According to the annual performance report of the operators, in 2019, the two parties deployed a total of 50,000 5G base stations, saving about 10 billion yuan in investment costs. In 2020, the two parties will build 250,000 new shared 5G base stations, covering all cities and prefectures across the country. China Broadcasting Corporation, a new 5G operator, has been actively negotiating with telecom operators on 5G network co-construction and sharing, hoping to quickly form 5G service capabilities by leveraging its own frequency advantages and the operators' advantages in network construction and operation. As the curtain of co-construction and sharing gradually opens, co-construction and sharing will become a booster for the rapid deployment of 5G networks.

Industry-specific networks are a new way for 5G to empower vertical industries. The greatest value of 5G is reflected in enabling the digital transformation of thousands of industries. Since vertical industries have high requirements for network latency, security performance, and business openness, 5G industry-specific networks need to be isolated and independently built from the public network. Many countries around the world, including Germany, the United Kingdom, and Japan, have allocated 5G dedicated frequency bands for vertical industries. Japan's Fujitsu has built the world's first officially commercial 5G private network. The Ministry of Industry and Information Technology has clearly proposed to carry out 5G industry virtual private network pilots and 5G industry-specific frequency planning. China Unicom has built the first domestic enterprise private network in the field of intelligent manufacturing based on 5G slicing for Gree Electric; China Mobile has built 5G smart mine private networks for Yangquan Coal Group and Baotou Steel Group. 5G industry-specific networks have multiple network construction methods, including independent private networks, integrated private networks, and network slicing. Independent private networks are completely isolated from the 5G public network, use private network frequency bands or public network frequency bands, and have high construction and maintenance costs. They are suitable for high-value industry customers with extremely high requirements for security and reliability. The integrated private network shares the access network or core network control plane of the public network, and the enterprise builds its own user plane or edge computing equipment. It is suitable for enterprise customers who have low network requirements and are cost-sensitive. Network slicing is a virtual slice subnet of the 5G public network. The network construction cost is low, and the security of enterprise data depends on the network slicing capability. As the technology and business model gradually mature and the frequency planning becomes clearer, 5G industry private networks will enter a period of explosive growth.

3. New Business Model

The business model based on traffic management has reached its peak in the 4G era. In the 5G era, the traditional business model will be difficult to sustain. At present, the 5G business model is in the process of exploration. The new business model is an opportunity for operators to transform and upgrade and build a new pattern, and it is also the key to the success of my country's 5G development. Innovation in the 5G business model requires the expansion of diversified revenue channels, the strengthening of cross-border cooperation, and the creation of a win-win industrial ecology to create a good environment for the development of 5G.

Explore diversified revenue models. To achieve the dual growth of 5G's social benefits and corporate economic benefits, operators are actively expanding diversified revenue models based on traffic, connections, slices, terminals, and platforms. The traffic-based package model is still the main business model for personal eMBB scenarios in the early stage. Operators can formulate differentiated pricing strategies based on users' requirements for bandwidth, latency, etc. Driven by the demand for the Internet of Everything, operators also need to continue to explore the connection service revenue model based on IoT terminal devices. Network slicing is the killer feature of 5G, and slicing as a service has become the key business model for operators. Domestic operators have cooperated with equipment manufacturers and enterprises and institutions in the fields of industrial manufacturing, telemedicine, smart grids, etc. to complete the deployment of 5G slices for specific fields, and explore the service capabilities and service models of 5G slices through pilot projects. Formulating differentiated slice charging models and providing standardized, customized, and open slice services are the main directions for operators to carry out slice business in the future.

Create a win-win 5G industry ecosystem. Strengthening cooperation between upstream and downstream of the industry chain, customers and the government is the key to innovation in 5G business models. Building a 5G industry ecosystem is an inevitable choice for operators to develop 5G. Since the commercialization of 5G, operators have actively cooperated with industry chain partners and industry customers in various forms, establishing cross-border alliances by establishing 5G industry alliances, joint innovation centers, industry funds, and professional operating companies, or conducting capital operations by mergers and acquisitions, equity participation, and venture capital. Operators give full play to their advantages in 5G construction and operation, and with the business operation advantages of industry partners in specific fields, they form a joint force to jointly promote the integration of the ICT industry and the OT industry, provide end-to-end overall solutions for the digital transformation of production and service industries, enhance operators' cross-border resource integration and specific industry operation capabilities, empower ecological partners, and achieve mutual benefit and common growth.