Introducing social capital to solve the 5G network construction dilemma

Three months after the issuance of 5G licenses, the whole society has increasingly high expectations for 5G. 5G not only carries the future hopes of operators, but also shoulders the important task of developing the industrial Internet and creating a new era of the Internet of Everything. 5G construction has risen to the level of national strategy. At present, both the government administrative departments and the three major operators are actively and fully building 5G, but at the same time we also see that 5G construction faces major challenges, one of which is the huge construction cost.

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Previously, the industry predicted that the cost of 5G construction would reach 3.2 trillion yuan (the same below), which is 3 to 4 times the cost of 4G construction. With the 4G investment not yet fully recovered, such a huge construction cost is a huge pressure on operators. At present, the 5G network investment of the three major operators in 2019 has been made clear. China Mobile is expected to invest 24 billion yuan to build 50,000 base stations across the country; China Unicom is expected to invest 8 billion yuan to build 40,000 base stations; China Telecom is expected to invest about 9 billion yuan to build 40,000 base stations by the end of the year.

Compared with the generous spending when building 4G, the operators seem to be a little "stretched" for the funds of 5G network construction. In response to this, the industry has been reporting from time to time that the investment of the three major operators in 5G is lower than the market forecast. Not long ago, Wang Xiaochu, chairman of China Unicom, made a clear statement at the half-year performance conference to maintain this year's 5G capital expenditure of 8 billion yuan. At the same time, Wang Xiaochu pointed out that Unicom has negotiated with both Telecom and Mobile on the development of 5G. The overall idea of ​​cooperation with Telecom is "co-construction and sharing", each maintaining its own base station, operating its own brand and customer base, and the direction of negotiation with China Mobile is "roaming mode". Previously, China Mobile used leasing to build 5G networks. Whether it is Mobile's "groundbreaking" leasing network construction method or Wang Xiaochu's 5G "co-construction and sharing" statement, it confirms the financial pressure of operators in 5G construction from the side.

5G construction is a long process, and 5G investment is also a gradual process. Wen Ku, spokesman for the Ministry of Industry and Information Technology and director of the Information and Communications Development Department, said that network construction from scratch requires a process. Rome was not built in a day, and 5G was not built in a day. But 5G is the main development direction of the new generation of information and communication technology, which is beyond doubt. Moreover, 5G will be widely and deeply integrated with various fields of the economy and society, and will also become a new engine for future economic transformation and growth. In the long run, increasing 5G investment and promoting the sustainable development of 5G is in line with the long-term interests of the country, the industry, and enterprises.

Therefore, from the overall perspective, 5G construction is unquestionable and urgent. Currently, operators are also working hard on 5G construction. As the entire industry is facing difficulties and the technical standards are not yet fully mature, it is reasonable for operators to adopt a cautious strategy in 5G construction. As for how to solve this problem, industry experts believe that the first is to accelerate the maturity of the industrial chain and reduce the cost of 5G equipment; the second is to reduce the cost of 5G through "co-construction and sharing".

Of course, there is another idea, which is to accelerate 5G construction by introducing social capital. The high cost of 5G construction is an undeniable fact. Under the premise of the correct general direction and general trend, accelerating the construction of 5G is also one of the correct choices. The industry should boldly explore new ideas and forms of 5G. Although China Mobile's previous exploration of leasing 5G base stations to build 5G networks was stopped by relevant departments, it was also a positive exploration.

Today, operators are "short of money" for 5G construction. We should break the shackles of thinking that communication networks must be invested and constructed by the state, actively introduce social capital, and accelerate the construction of 5G networks. In this regard, the railway system has actually made active attempts a long time ago. In order to solve the problem of excessive investment in 5G construction, Professor Lv Tingjie of Beijing University of Posts and Telecommunications proposed that private capital and foreign investment should be allowed to participate in the investment under the premise of ensuring national security. Lv Tingjie believes that through the participation of the financial industry and other ecological construction, China should explore a set of methods for financing and leasing 5G network construction. This model can be introduced into the investment and financing of the future development of the communications industry, creating a diversified business model, alleviating the concerns of operators in heavy asset investment, and solving the problem of unbalanced development in the industrial ecology.

5G construction requires not only innovation in technology and business, but now is also the time to innovate in construction models.