The property management company asked for 300,000 yuan as an “entry fee” for 5G to enter the residential area. The real problem is the problems beyond technology.

The 5G waves are rising higher and higher.

In early June, the Ministry of Industry and Information Technology issued 5G commercial licenses to the four major operators, marking the official entry of China into the 5G era. Subsequently, 5G swept the entire society like a heat wave. For a time, the upstream and downstream of the 5G industry chain were all excited, and the general public was immersed in the joy of the arrival of 5G.

However, with happiness comes worry. For operators, the challenges brought by 5G commercial use will also come one after another, the first of which is the network construction problem. For example, from a macro perspective, 5G network construction requires more investment and is more complex in design than 4G network construction; from a micro perspective, the process of 5G network construction will inevitably involve the interests of many stakeholders...

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Do you still remember the 5G cancer-causing incident that made a lot of noise? Not only in China, but also in many places abroad, there has been a boycott of 5G entering residential areas. After the incident, relevant national departments, operators, and industry experts have refuted the rumors and launched 5G science popularization.

Now, one wave has not yet subsided, another wave has risen. According to a recent report by the Economic Observer, a communications technology project manager in Beijing revealed to reporters that the 5G network has just started, and it was originally thought that it would be possible to roll up the sleeves and do a great job like the 4G era. However, before the sleeves were rolled up, a basin of cold water was poured on the face - now even the construction team wants to enter the gate of the community or office building is a big problem.

300,000 coordination fees, shutting out 5G

As we all know, in the early stage of 5G commercialization, according to the progress of 5G standard formulation, operators will mainly focus on the deployment of enhanced mobile broadband (eMBB) scenarios, such as the most typical smart home scenarios, mobile payment scenarios, ultra-high-definition video applications, etc. To meet this, the most critical link is to build 5G base stations on a large scale and lay a continuous 5G network covering the entire city.

However, in the actual implementation process, it is not an easy task to quickly complete the deployment of 5G base stations.

In the process of 5G network construction, not all problems can be solved by operators' own efforts. In the report, Beijing Mobile said that in general, many property management agencies of office buildings or residential communities have misunderstandings about 5G. Even if they add new base stations based on existing 4G base stations, they will be set up with various obstacles or directly rejected. What's more, many property management agencies regard it as an opportunity to "make money" and demand high coordination fees.

Often when operators' base stations are deployed in these places, in addition to paying the 5G contract fee to the property agency, they also need to pay a coordination fee. This amount is called the "cooperation fee" in the industry, and this "habit" has existed for many years.

As industry insiders claim, coordination fees are usually determined based on the regional location and the number of base stations built. In residential areas, based on the cost of 500,000 to 600,000 yuan for a macro base station, the average coordination fee that needs to be paid to the property is about 100,000 yuan. However, some community properties are asking for exorbitant prices, such as 300,000 yuan.

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Of course, this is a decision made by developers and property developers after weighing the pros and cons and considering their own business. Although it verifies the actual difficulties and trivial problems that need to be faced when 5G is implemented, it is not enough to make people pessimistic about 5G deployment. Some industry insiders also said that for large communities, the coordination fee of 300,000 yuan is not much, because the admission fees of some university campuses have reached 500,000 yuan or even 800,000 yuan. After all, 5G construction is bound to involve the interests of multiple parties.

5G network deployment, gradually advancing

There is no doubt that all kinds of rumors in the early stage of 5G construction will be amplified at this time, but isn’t the law of development of things the unity of progress and tortuosity?

According to the previous plans of the three operators, by the end of this year, China Mobile, China Telecom and China Unicom will build 130,000 5G base stations across the country, of which China Mobile plans to build 50,000, while China Unicom and China Telecom plan to build 40,000 each.

According to the statistics of the Ministry of Industry and Information Technology on the growth of mobile communication base stations in 2018, the number of 4G base stations increased by 439,000 last year alone, reaching a total of 3.75 million. In the first half of 2019, affected by the Internet of Things business, the number of mobile communication base stations soared again, of which 4G base stations approached 5 million, accounting for 60.8% of the total number of base stations.

From this point of view, firstly, only 130,000 base stations are planned in the first year of 5G commercialization, which is very conservative compared with the 4G era, which means that 5G will require a longer construction period. Secondly, looking back at the commercialization of networks in the 3G and 4G eras, outdoor coverage was mainly carried out in the early stage of commercialization, and then indoor coverage was gradually improved to further improve the general service experience of mobile phone users. In the context of the overall promotion of 5G, it seems that this vertical and horizontal strategy will also be followed.

First, the construction of 5G networks will be slower. Although the construction of 5G base stations has accelerated with the issuance of 5G commercial licenses, the number of 130,000 base stations is still relatively conservative.

One reason for this is the operators themselves. In the early stage of 5G commercialization, the three operators all adopted a relatively conservative attitude towards network construction. According to the latest news, China Mobile, which has invested the most in 5G construction this year, has only invested 24 billion, while the total investment in 5G needs to reach 1.2 trillion. Therefore, the initial investment of a drop in the bucket will not have much impact on the overall 5G network construction.

On the other hand, there is pressure from the supply chain. Ren Zhengfei has previously publicly stated that Huawei can only produce 600,000 5G base stations this year, and is expected to expand its production to 1.5 million next year, and can basically open up supply to the world the year after. As the world's leading communications company, Huawei has more than 50 5G commercial contracts. It can be seen that it is not easy to provide 5G base stations on a large scale.

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Second, the initial construction of 5G base stations should be focused accordingly. The initial construction of 5G networks may need to be deployed according to market and user needs, with priority given to key hotspots, from outdoor to indoor areas.

As we all know, a large part of 5G is for industrial users. In the future, it will be part of the production factors of industrial users, providing them with safe and reliable network communication technology. Compared with 3G and 4G, 5G can build networks for the needs of B-end and C-end respectively.

The report cited China Telecom's strategy for 5G network construction, which prioritizes B-side application cooperation institutions, such as hospitals and airports, and selects some high-traffic, high-demand, and commercially valuable areas as the key areas for initial network construction through big data analysis for the C-side, and then promotes them to other areas.

This network construction method reduces the waste of initial resources to a certain extent, and at the same time plays a positive role in tapping the commercial value of 5G, and will definitely have a positive impact on subsequent 5G investment.

Summarize

Whether it is the "5G cancer-causing theory" or the "sky-high coordination fee problem", they are just some specific difficulties on the road to 5G construction. As for the general direction, the author is always optimistic. Is it difficult to build a 5G network? The answer is definitely yes. And for now, without sufficient investment funds, a specific and clear business model, and the birth of successful value cases, 5G seems to be struggling, but is this enough to show that 5G construction is difficult to develop? Obviously, this pessimistic mood is difficult to gain a foothold.

The author believes that the "sky-high coordination fees" are just a small episode in the construction of 5G. Moreover, the report also emphasizes that this is only the practice of some institutions. In the context of the overall long-term construction of 5G, these problems are not a big deal.