The 5G license has been issued, what should we do now?

The 5G license really came a bit suddenly.

People familiar with the communications industry know that the issuance of licenses is often chosen on an important and meaningful day. For example, the first node for issuing licenses in the first half of the year is 517 World Telecommunication Day.

However, on May 17 this year, there was no sign of issuing licenses.

Just when everyone thought that the licenses would be issued by the end of this year or even next year at the earliest, and less than half a month after 517, the authorities suddenly announced that they would issue the licenses. Moreover, it took only three days from the release of the rumor to the official issuance.

It can really be said that it was a sudden and unexpected move.

The reason why it happened so suddenly is probably what everyone thought, and it is related to MYZ. Many industry insiders even pointed out that this license was actually issued for Company H.

June has been a turbulent month. H Company has been banned and attacked one after another. It can be said that it is in a sensitive period. The entire communications industry, or the entire Chinese technology industry, is in a very sensitive period.

I believe that issuing 5G licenses during this extraordinary period is not a planned arrangement, but more of a well-considered response strategy.

Anyway, the license has been issued. After cheering, we still need to calm down and think about it - what should we do next?

The license was issued at 8:40 yesterday, and the stock market opened at 10:00. I believe everyone has seen the performance of the stock market, which is not very appropriate. Of course, there are other objective reasons for this. However, to a certain extent, this also illustrates the market's attitude and thoughts on 5G.

The issuance of license plates is actually only the first step in a marathon. How to run, where to run, and how to successfully reach the finish line are issues that every participant needs to think about seriously.

What we need to think about most, of course, are the license recipients, our four major operators.

Among these four major operators, the biggest variable is undoubtedly China Radio and Television.

Although the news that China Radio and Television had obtained a 5G license had been repeatedly predicted before, we were still a little surprised when it really got the license.

Although China Radio and Television Corporation has the qualifications of a telecom operator, it has no experience in building or maintaining mobile networks, let alone a nationwide mobile network, and even private networks.

[[267594]]

This means that there are major problems with the technical and talent reserves of radio and television.

More importantly, the radio and television industry has no money.

The construction of communication networks is a game for the rich, not to mention that we are going to build 5G. The cost of building a 5G network is much higher than that of 4G (according to forecasts, the main investment of operators in building 5G networks will increase by 68% compared with 4G, reaching 1.23 trillion), which is a very huge investment.

The radio and television industry itself certainly does not have the money to develop 5G. The only way is to introduce capital.

So, where does the capital come from? Which capital is willing to come? Which capital has the strength to come? We don’t know the answer now and can only wait and see.

Even if the radio and television industry can find capital, it must first solve its own problems. The long-term monopoly has caused many chronic problems to accumulate within the radio and television industry, including backward management, closed-minded thinking, lax work style, and lack of competitiveness. If it continues as it is now, even if there is capital investment, I believe there will be no good results.

In today's telecommunications market, the three major operators, China Mobile, China Telecom and China Unicom, have already been fighting each other to the death and are covered in bruises. If radio and television rashly enter the market, it will be like a sheep entering a wolf's den and will be eaten alive.

I personally think that the radio and television industry should not be complacent about obtaining the 5G license, and there is no time to be complacent. The most urgent task is to "build a team, set a strategy, and lead the team." First, find a super strong person to clean up the team from top to bottom, and then formulate a 5G strategy that suits its own development, and then step by step train the team and grow it in the process of construction. If the radio and television industry can take this opportunity to incorporate local radio and television across the country and form a "unified" radio and television industry, then there is still a chance. Alternatively, the radio and television industry can win over more partners, exchange resources for resources, form an alliance, and fight.

If the radio and television industry continues to be complacent and stagnate, the final result will be nothing more than begging for food with a golden bowl in hand.

Next, let’s talk about China Telecom and China Unicom.

After the 5G licenses were announced, the two companies finally got one license each. As a result, the possibility of the two companies merging has been greatly reduced. However, this possibility still exists.

Xiaozaojun has previously analyzed that the merger of the two companies has more advantages than disadvantages. On the one hand, both companies are weak, and only by merging can they have the ability to build a better full-network 5G. On the other hand, issuing one less license can make spectrum allocation more generous, and a lot of resources for network construction can also be saved.

As for the disadvantages, it is that it will have a certain negative impact on market competition and affect the end users' right to choose and bargaining power.

China Telecom and China Unicom are not having an easy time right now. Facing China Mobile, a competitor that is stronger than the two of them combined, the two operators are under great pressure to perform well. Since China Unicom started the mixed-ownership reform, although various big and small king cards have been sold in large quantities and the user growth figures are acceptable, the profit margin, service quality and efficiency issues have not been well resolved.

Although China Mobile is having a hard time, the road ahead is not complicated. Just keep working hard and there is nothing to think about. Although there were rumors that China Mobile would be split, the probability of this happening is very low.

In the context of the country's requirements for speed increase, fee reduction and number portability, operators will face greater competition pressure in the second half of the year, and will be under greater pressure to find new growth points. Although all operators have obtained 5G licenses, I think it is still a question whether operators really want these licenses.

Getting a license means you have to build a network, and building a network means spending money.

It's easy to say, but where does the money come from? After the network is built, who will pay for it?

Will the consumer Internet pay for 5G? Will mobile phone users pay for 5G? Will the industrial Internet pay for 5G? Will the implementation of 5G applications be as smooth as expected? Everything is unknown.

Although so many pilot projects were built in the first half of the year, we have not seen many 5G application cases that have really landed and generated value. After the pilot projects, problems with coverage quality began to emerge, and the network speed was easily affected by external factors and was not satisfactory.

The three major operators were also unsure. They vowed to develop SA (independent networking) at the time, but ended up throwing themselves into the arms of NSA (non-independent networking) one after another. To put it bluntly, they still lack confidence in 5G and are more concerned about saving money.

In any case, the arrow is on the string and has to be shot. Operators can only think positively. Maybe 5G hot-selling applications will appear soon, maybe the industrial Internet will really explode soon, and maybe what they are doing now is the right move.

Operators are worried, but equipment vendors are undoubtedly happy. Once the 5G license is issued, orders will surely come in continuously. The market will start to get busy, and R&D and user services will also start to work overtime. We have waited so long, isn't it just for this moment?

The half-dead partners in the industry are also getting excited. After a long drought, the start of 5G network construction will bring a large number of engineering construction project contracts. Now they finally have money to pay employees and can survive for another year or so.

The size of China's communication network is so huge that it is basically equal to the sum of other countries. Once activated, such a market size will be like a shot in the arm, which will revive the entire communication industry from its slump. If 5G can really open the era of "Internet of Everything" as expected, then history will always remember this great day of June 6, 2019. And we will also be witnesses of great history.