5G operators reshuffle four operators 2.5 networks

China Telecom and China Unicom jointly announced that they will build and share a 5G access network and 5G frequency resources across the country. This is the largest and most influential war-preparedness cooperation between the two companies. However, the joint construction and sharing is limited to the 5G access network, and the core network is still independent, so the two are still in a competitive relationship.

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China Telecom and China Unicom form a group under pressure from election

The reasons that prompted China Telecom and China Unicom to cooperate in building the network are, first, to reduce cost expenditure, and second, the 5G network frequency bands of the two are connected.

First of all, the cost of operators' investment in 4G has not yet been recovered, and now they have to build 5G base stations on a large scale, which requires huge investment. According to investment institutions' forecasts, China's 5G investment will reach 1.5 trillion from 2019 to 2025. The coverage of 5G base stations is only half of that of 4G base stations. The number of 5G base stations needs to be twice that of existing 4G base stations, and a large number of indoor base stations will also be required. According to the original plans of China Unicom and China Telecom, by the end of 2019, each of them will build 40,000 base stations, with a construction cost of about 500,000 yuan per base station, and a total investment of 80,000 base stations of 40 billion yuan. At present, the revenue of the three major operators has entered a negative growth stage, and they are under great pressure to face such a huge investment.

Second, according to the 5G network spectrum allocated by the Ministry of Industry and Information Technology, China Telecom's 5G network frequency is 3400MHz-3500MHz, and China Unicom's 5G network frequency is 3500MHz-3600MHz, and the two frequency bands are connected. Technically speaking, it is entirely possible to use one set of base stations and antennas to support the 5G access networks of both China Telecom and China Unicom.

Four operators and 2.5 networks

Faced with cost pressure and the reality of declining revenue, China Telecom and China Unicom chose to build 5G networks together. This led to the emergence of a new pattern of operators in the 5G era - four operators and 2.5 networks.

The four operators are China Mobile, China Unicom, China Telecom, and China Broadcasting Corporation, which have obtained 5G commercial licenses from the Ministry of Industry and Information Technology. Why is there only 2.5 networks? Because China Mobile will build a 5G access network on its own, China Telecom and China Unicom will jointly build a 5G access network, and China Broadcasting Corporation is relatively weak and has not yet completed a complete 5G construction plan, so it can only be counted as half a network.

What impact does it have on users?

The joint construction of 5G access networks will mainly affect the cost of operators and will have an impact on the industry. Although the 5G access network is jointly built, the core network is independent, which will drive the development of the industrial chain of antennas, base stations, power supplies, optical fibers, etc.

For ordinary users, it can be said that there is no impact. China Unicom users still use China Unicom packages, and China Telecom users still use China Telecom packages. The two still maintain a competitive relationship.

Why don’t all operators band together?

Seeing this, some friends can't help but ask, why can't China Mobile build a 5G access network together with China Unicom and China Telecom? In this way, the three operators don't have to build their own base stations. Wouldn't it be a great cost saving to use the same base station?

The answer is no. First of all, the 5G network frequency used by China Mobile is 2600MHz and 4900MHz. This frequency band is obviously discontinuous and needs to be isolated from the frequency band of the Beidou navigation system. The 5G network frequencies of China Unicom and China Telecom are connected, with a bandwidth of 100MHz. In addition, the existing filters and PAs support a maximum bandwidth of 200MHz, so it is not a big problem to support the joint construction of the network between the two. In addition, if they are all built on one base station, it will inevitably affect the income of antennas, base stations, power supplies, optical fibers, and tower companies in the industry chain, causing the entire 5G market to be cold.

Conclusion

Although China Telecom and China Unicom are jointly building 5G networks, their market share will still not catch up with China Mobile. The operator market in the 5G era will stage a "Sun Liu vs. Cao" situation, forming a market structure of "one super, two strong, and one rookie".