Ten questions about the issuance of 5G temporary licenses: how far is 5G?

Recently, authoritative information about 5G has been continuously released, and 5G is really getting closer and closer to our daily lives! On January 10, 2019, Miao Wei, Minister of Industry and Information Technology, said in an interview with CCTV that in 2019, temporary 5G licenses will be issued in several cities, so that large-scale networking can be realized first in some cities and hot spots, while accelerating the industrialization process of terminals and network construction. Miao Wei believes that by the second half of the year, single products that can truly have commercial use value will be put on the market, such as 5G mobile phones and 5G iPads. In addition to the consumer field, the application of 5G in various fields such as education, medical care, and elderly care will also be accelerated.

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What is a temporary license? When can we use 5G? How large-scale will the network construction be and how fast will it progress? Let’s take a look at Chanxinjun’s interpretation in the form of “Ten Questions”.

1. What is the 5G temporary license?

The 5G temporary license can be interpreted as a trial commercial license. This is the first time that the term temporary license has been officially proposed. Minister Miao Wei mentioned that 5G temporary licenses will be issued in several cities in 2019, which can be understood as equivalent to the trial commercial licenses of the 3/4G period.

2. What is the significance of issuing temporary licenses?

On December 21 last year, the Central Economic Work Conference clearly proposed to "accelerate the pace of 5G commercialization." 20 days later, the Ministry of Industry and Information Technology announced that it would issue 5G temporary licenses, which was the implementation of the central spirit and a timely response to the market's expectations for trial commercialization.

In December last year, on the basis of obtaining the nationwide 5G low- and medium-band experimental frequency use license, the three major operators have accelerated the promotion of large-scale trials and application demonstrations in major cities. The issuance of temporary licenses will start the 5G transition from the trial to the trial commercial stage. The trial commercial stage focuses more on the application end, and more companies will be able to participate in the development of 5G applications. The opening of the gate will greatly stimulate the enthusiasm of the industry to participate and invest substantially, bringing great economic and social benefits. There is no doubt that 5G will usher in a new round of technological innovation and become the engine of the new economy. Under the high combination of national will and market demand, the 5G industry will accelerate its growth in 2019.

3. After the temporary license is issued, will the application be available to all users?

The trial commercialization after the issuance of the 5G temporary license is not for all users. Operators accumulate operating experience of the new standard by issuing numbers to "friendly users". Before each generation of communication network standards begins to be used on a large scale, there will be a trial commercialization stage. The trial commercialization is for "friendly users". Operators select a group of seed users in the background system according to the user's consumption level, usage habits, complaint records, etc., and invite them to use the new generation of communication networks. The number of "friendly users" is related to the matching of network construction and terminal applications, and it is difficult to estimate at present. After the trial operation in the trial commercialization stage, the operator has a full understanding of the network coverage, user usage habits, etc., and further improves the hardware and services before it can be officially commercialized.

4. Why are temporary 5G licenses issued in certain cities?

Minister Miao Wei said: "Issuing temporary 5G licenses in several cities will enable large-scale networking to be realized in some cities and hot spots first." In the past, the issuance of 3/4G licenses did not adopt the practice of some cities. This is because when 4G networking was established, foreign countries already had mature experience to learn from, but China's 5G development has always been in a leading position in the world. The current maturity of the 5G industry chain is lower than that of the 3/4G trial commercial stage. Building 5G in some cities is conducive to operators controlling costs, controlling risks, reducing the complexity of trial commercialization, and concentrating on experiments and focusing on filling the gaps in the industry chain.

Table 1. 5G pilot cities of the three major operators and 5G trial frequency allocation plans

Data source: China Mobile, China Telecom, China Unicom,

Ministry of Industry and Information Technology, Xinhuanet, China Fortune Land Development Industry Research Institute

When will the official 5G commercial license be issued?

The time nodes from 3G and 4G trial commercialization to official commercialization are as follows:

(1) It took China Mobile 4-5 months from obtaining approval for 3G trial commercial use to obtaining a formal commercial license;

(2) It took China Mobile 10 months from launching its 4G TD-LTE trial commercial service to obtaining its official 4G TD license;

(3) It took 8 months for China Telecom and China Unicom to obtain the 4G FDD-LTE trial commercial license and the official commercial license.

Table 2. Key time points for 3G, 4G and 5G construction of the three major operators

Data source: China Mobile, China Telecom, China Unicom,

Ministry of Industry and Information Technology, CICC, China Fortune Land Development Industry Research Institute

5G is the new driving force of the new economy and the foundation of the new technological wave. Chanxinjun estimates that the government will speed up the commercial construction of 5G networks as much as possible. Referring to the pace of issuing 3G and 4G licenses and combining the maturity of the industrial chain, it is expected that the official commercial licenses of 5G will be issued between Q3 2019 and Q1 2020. The issuance of official commercial licenses will force the large-scale supply of products, and the development of equipment, terminals, software and hardware systems needs to be accelerated.

6. Why is the emphasis on integrated application in the issuance of temporary licenses?

Minister Miao Wei emphasized "accelerating the cultivation of 5G integrated applications. Continuously deepen the C-V2X-based Internet of Vehicles standard system, industrial collaboration and demonstration applications, accelerate the integrated application of the Industrial Internet and 5G, and further promote collaborative innovation between 5G and agriculture, transportation, medical care, education and other fields."

5G development is at different stages. Before June 2018, the 5G R15 standard had not been frozen. It was more about promoting internal and external field tests and accelerating the maturity of networks and terminals. At present, it is very important to enter the commercial stage, and integrated applications have become very critical. In the future, 5G will gradually change from mainly connecting people to people to connecting people to things, and then to connecting things to things. In the future, about 20% of 5G infrastructure will be used for communication between people, and 80% will be used for things and things, that is, the Internet of Things. Video, AR/VR, new media and automotive fields will be breakthroughs for integrated applications.

Chanxinjun believes that the first scenario where converged applications can make a breakthrough is the pan-video field. From the current standard definition and high definition to the transformation of 2K, 4K, and 8K, as well as the application of AR, VR and new media, this is a clear route.

The most likely scenario for integration is the Internet of Vehicles. In order to support the development of my country's intelligent connected vehicle industry, the Ministry of Industry and Information Technology issued the "Regulations on the Management of the 5905-5925MHz Frequency Band for Direct Communication of Internet of Vehicles (Intelligent Connected Vehicles) (Interim)" on November 13 last year, planning a dedicated frequency resource with a total bandwidth of 20MHz in the 5905-5925MHz frequency band for direct communication technology of V2X intelligent connected vehicles based on LTE evolution. This frequency band is for communication between vehicles. For the entire Internet of Vehicles, the communication between vehicles is three-dimensional. Without 5G, the basic connection cannot be made, which will also affect the communication between vehicles. On December 27, the Ministry of Industry and Information Technology issued the "Action Plan for the Development of Internet of Vehicles (Intelligent Connected Vehicles) Industry", proposing to accelerate the research and development of key technologies such as Internet of Vehicles wireless communication technology (5G-V2X) based on 5G design and commercial applications in some scenarios, and build an Internet of Vehicles architecture that combines communication and computing. Therefore, whether it is new energy vehicles or intelligent connected vehicles, it is expected to become an opportunity for the automotive industry to overtake on the curve. From the perspective of 5G, automobiles will become a very good entry point for 5G commercial applications.

7. Will the issuance of temporary licenses promote NSA and SA networking?

From the perspective of network equipment, the basic functions of NSA networking equipment are relatively complete, and the next step is to conduct joint debugging with mobile terminals. Only then can we decide whether the entire NSA can be deployed commercially on a large scale and what functions it supports. Currently, the internal field tests of equipment manufacturers and operators are progressing smoothly, and the next step is to conduct field tests.

For SA testing, the 3GPP R15 version is currently used, and the R16 version of the official commercial stage has been postponed by 3GPP to Q2 2019. In other words, the SA test can only be completed by this time at the earliest, and then the rhythm of SA commercial deployment can be determined.

After the temporary license is issued, the large-scale test network can be converted into a commercial network, which will inevitably accelerate the process of NSA networking. The R16 version restricts the SA networking process.

8. After the temporary license is issued, can 5G mobile phones be mass-produced? What is the progress of 5G mobile phone chips?

Qualcomm's released 5G baseband chips only support NSA terminals. They will be able to be connected with various equipment manufacturers for testing in early 2019. Then the performance test of 5G network and the interoperability of terminals will come naturally. It is reported that Qualcomm will release a new 5G baseband chip that supports both NSA and SA networking modes in Q1 2019. Intel plans to release 5G NSA baseband chips in the first half of the year, and may release chips that support both NSA and SA in the second half of the year.

If we consider the issue of 5G mobile phone volume from the perspective of batch shipment, NSA terminal chip manufacturers are not under much pressure, and mobile phone models have already been leaked at this stage. The next major issue is to conduct docking tests with equipment manufacturers, after which mobile phone manufacturers can make commercial mobile phones for users. From the perspective of the entire docking test process, equipment manufacturers need two to three months, and operator network testing will take about three to six months. It can basically ensure that China's small-scale trial commercial use of 5G mobile phones will be completed before the 70th anniversary of the founding of the People's Republic of China.

9. After the temporary license is issued, if operators choose to build a network in NSA mode, what will be the difference in investment compared with SA network?

From the perspective of the entire investment, the NSA and SA networking methods do not have a big impact on investment. At present, 5G base stations need to be newly built anyway, and the core network can be upgraded or newly built, depending on the operator's choice. If the original core network is used because it carries 4G and 3G users, a new core network may be needed if it has a big impact on user usage. If a new core network is built, the investment is basically the same as that of SA networking.

In addition, in the 5G mobile network investment, the wireless network accounts for 70%, and the core network and transmission network account for only 30%. Compared with the core network, a larger part is the transmission network investment. Therefore, there is not much difference in construction investment between NSA and SA networks.

10. Compared with other countries’ issuance of trial commercial licenses, China’s issuance of temporary licenses seems a bit behind. So is there a gap between the construction progress of 5G in China and abroad?

Verizon in the United States announced in October 2018 that its 28G frequency can provide FWA services. In fact, Verizon's products are based on its own modified underlying protocol, not the 3GPP standard. As for communication equipment, it will need to be updated based on the 3GPP standard in the future, so Verizon will also update according to 3GPP. The services of the three Korean operators in the 3.5G frequency range of 5G terminals based on the 3GPP standard are only to realize the router and Wifi functions. Therefore, whether the United States uses non-3GPP standards or South Korea uses 3GPP standards, it is basically an advertising effect. Real large-scale commercial use has not yet been achieved. It is just publicized that the construction of commercial network coverage has begun and services can be provided, but there is actually no large-scale commercial deployment.

Driven by policies, China's 5G deployment has been significantly accelerated. China Telecom has announced that it will adopt SA networking, so the time will be slower. However, if China Mobile and China Unicom use NSA networking to seize the lead, they will complete and provide 5G services in the first half of 2019. China Mobile has announced that it will launch 5G terminals in the second half of this year for the entire friendly user group.

China's 5G, as a member of the first group, will lead the world!