In June 2019, MIIT issued four licenses for the commercial deployment of 5G in China – a year ahead of the expected timetable. China Radio and Television was granted the “golden” 700 MHz band, and becomes a prospective new tenant on China’s ~2mn telecom towers. With the 5G licenses came a new commitment to China’s “co-build, co-share” philosophy, and a new set of guidelines set out in Document No. 123, which obligates local government in China to build databases of potential 5G sites, and to share their own sites to contribute to the common goal of the swift, efficient deployment of 5G in China.
Four 5G licenses issued; here’s what we know about spectrum allocation
On June 6, 2019, China’s Ministry of Industry and Information Technology issued 5G commercial licenses to China Telecom, China Mobile, China Unicom and China Radio and Television, which was one year ahead of the planned commercial launch of 5G in 2020.
According to the 5G spectrum plan in December 2018:
- China Telecom acquired 100MHz of spectrum resources in the 3.4-3.5GHz band
- China Mobile acquired 160MHz bandwidth in 2515-2675Mhz and 100MHz of spectrum resources in 4.8-4.9GHz
- China Unicom acquired 100MHz of spectrum resources in 3.5-3.6GHz
- China Radio and Television has the “golden band” of 700 MHz
5G deployment strategies
China Telecom: With translations courtesy of Yolanda Liu, Research Manager for TowerXchange China, China Telecom announced “after obtaining a 5G License, China Telecom will continue to practice the development concept of ‘innovation, coordination, green, open and sharing’. (China Telecom will) develop 5G network construction with the goal of high quality development, actively exploring and promoting 5G network co-construction and sharing, reducing network construction and operation and maintenance costs, and ensuring high quality network and rich application services.”
China Mobile: Chine Mobile re-affirmed commitment to promote the ’5G+’ plan, and proposed that “after obtaining 5G business license, China Mobile will accelerate 5G network deployment, build the world’s largest 5G quality network, and vigorously promote the ‘5G+’ plan. By the end of September this year, 5G services will be provided in more than 40 cities.”
China Unicom: China Unicom proposed they would “adhere to the roadmap of high-quality network construction and development, accelerate the pace of 5G business, promote 5G network co-construction and sharing, continue to promote in-depth Internet operation, build the 5G business ecolosystem, develop 5G characteristic services, continuously improve network quality and service levels, and let millions of consumers enjoy the achievements of 5G development.”
China Radio and Television: Zeng Qingjun, deputy general manager of China Radio and Television, said “the 5G license issued by the Ministry of Industry and Information Technology to China Radio and Television was meant to serve the national cable television industry and the national radio and television industry. The National Radio and television industry will take this opportunity to build a modern communication network with a high starting point. This network is different from the other three operators. The 5G network of Radio and Television will be a collection of modern radio and television communications and objects. A high starting point and high-tech 5G network of networking services enables broadcasting and television users to truly appreciate the wisdom of broadcasting and television services brought about by modern ultra-high definition television and modern loT and even the socialized wisdom of urban services.”
Impact of 5G license issuance on China’s towercos
China towercos, led by China Tower Corporation (CTC) which has ~97.5% market share, are pioneers in the construction and sharing of communication infrastructure. 5G will have several implications both for CTC and the several hundred smaller private towercos that operate in China.
Macro sites
Massive MIMO technology is used in 5G base stations. According to preliminary estimates, the number of 5G base stations needed to achieve the same coverage scale as 4G is at least 1.5-2 times that of 4G.
In addition, the influence of antenna multi-frequency, active integration and RRU integration trends should also be considered. Migrating from the separation of traditional antenna and RRU to integrated antennae and RRUs could reduce the amount of space needed on sites, thus reduce costs. However, the weight of and power consumption of antennae will increase.
Digital indoor systems
As 5G spectrum bands are higher, outdoor coverage will penetrate less effectively through walls, exacerbating the problem of indoor coverage. At the same time, with increasing demand for data, the network must become more and more dense, and the number of digital indoor systems will inevitably increase significantly.
At the same time, existing indoor networks often do not support the new 5G NR frequency band. Therefore, it is estimated that demand for new digital indoor systems in the 5G era will rise, creating opportunities for tower companies.
Supporting facilities
Early 5G deployments are likely to rely on existing 4G sites, where 5G and 4G coexist, while the superimposition of 2/3/4/5G will require the transformation of many supporting facilities. The addition of 5G equipment could increase power consumption by 2-3x, which may require seeking supplementary power beyond the grid, replacing AC and DC power supply cables, upgrading air conditioning or exploring free cooling, and replacing the rectifier module and/or batteries. All these jobs need to be undertaken by the tower company – in the case of China Tower, by its new subsidiary China Tower Energy Company.
New business opportunities
The early stages of 5G will be focused on faster network speed, whilst exciting new functions such as edge computing, ultra-low latency and network slicing are still being developed. Many of these new business opportunities remain dependent on 5G use cases which need to be proven. That said, 5G is a convergent world: it is contingent upon towercos, operators and ecosystem partners to integrate innovation and business model transformation.
We have seen some new business programmes from CTC, including special communication networks, forest fire prevention, maritime, environmental protection monitoring, satellite signal enhancement, and multi-purpose smart poles.
China Tower’s response to 5G
To facilitate the fast and efficient commercial rollout of 5G, CTC has said there are three main things that should be done:
CTC has formed a ‘social pole and tower resource’ site database, including 8.75 million street lamp poles, monitoring poles, more than 3.5 million power poles, and 330,000 property buildings, laying the foundation for low-cost and rapid deployment of 5G base stations
Deepening the sharing of tower sites
CTC has 1,950,000 stock sites, which are shared by China Telecom, China Mobile, China Unicom and China Radio and Television. At the same time, CTC has formed a “social pole and tower resource” site database, including 8.75 million street lamp poles, monitoring poles, more than 3.5 million power poles, and 330,000 property buildings, laying the foundation for low-cost and rapid deployment of 5G base stations. CTC intends to win the support of local governments, enabling it to take the lead in 5G site planning and resource co-ordination, and create a better 5G construction and development environment.
Strengthening technological innovation
CTC is following 5G product R&D and commercialisation, and cooperating with manufacturers to jointly develop new infrastructure adapted to the characteristics of 5G technology. The goal is to support the rapid development and maturation of related industries. Areas of focus include 5G digital active systems, 5G indoor distribution systems, and power system innovations.
Providing supporting services with better quality, lower cost and higher efficiency
CTC facilitate the sharing of existing sites, and the co-building of new sites if necessary. Construction and service innovations will unlock the benefits of low-cost and high-efficiency network rollout. CTC intends to expand the scope and depth of sharing, providing comprehensive and integrated services for telecom enterprises, such as sites, computer rooms (with a vision that sounds a lot like edge computing), transmission and supporting services, helping the industry further reduce costs, increase efficiency and intensify operation.
MIIT and the SASAC jointly issue a policy support document to guide co-construction and co-sharing
On April 26, 2019, the Ministry of Industry and Information Technology and the State-owned Asset Management Commission issued Document No. 123 “Opinions on the Implementation and Promotion of the Construction and Sharing of Telecommunication Infrastructure in 2019”. The translation is courtesy of Yolanda Liu, Research Manager, TowerXchange China.
The document focused on “Speeding up the Planning of 5G Base Station Sites”, and encouraged telecommunications enterprises and tower companies to follow the principles of “Planning First, Demand First.” According to the principle of “leading, market cooperation”, existing base station sites, street lamp poles, monitoring poles and other public facilities are to be intensively utilized for 5G. Independent towercos are encouraged to make full use of all kinds of open sharing facilities to participate in the construction of 5G base station sites.
Key contents of document no. 123 “Opinions on the Implementation and Promotion of the Construction and Sharing of Telecommunication Infrastructure in 2019”:
1. Strengthening the overall planning of tower construction needs; co-sharing always come first.
2. Speeding up site planning for 5G base stations. Telecommunication enterprises should put forward 5G base station requirements in a timely manner according to 5G business development needs and network planning.
3. Strengthening two-way resources open sharing. Encouraging telecommunications enterprises and tower companies to expand cooperation with power and railway industries, promoting two-way resources opening and sharing, effectively reducing the cost of network construction and facilities leasing.
4. Strict controls on the construction of new and exclusive tower sites.
5. Promoting common access to key places. Promoting the unified coordination and negotiation of indoor distribution and other communication facilities in key places, and synchronizing the planning, design and implementation with buildings, so as to achieve equal access for all telecommunications enterprises.
6. Strengthening the construction management and safety standards.
7. Strictly implementing national standards. If the telecom supporting facilities of residential and commercial buildings fail to meet acceptance standards, they shall not be connected to the public telecommunication network.
8.Eliminating broadband monopolies in business buildings.
9. Actively promoting the co-sharing and maintenance pilot project.
10. Strengthening co-construction and sharing of transmission resources. Enterprises already have poles, pipelines (ducts), base station sites and computer rooms, base station access transmission lines, cable core resources, international cable landing stations, transmission and access resources, et cetera. These must be open and shared if they meet sharing conditions.
11. Deepening cross-industry co-construction and sharing. Telecommunications enterprises should strengthen communication and cooperation with municipal, electric power, railway, highway and other institutions as well as relevant military departments, so as to enhance the level of cross-industry infrastructure co-construction and sharing.
12. The sharing rate (tenancy ratio) of roadside poles, pipelines (ducts) and indoor distribution system should be not less than 70%, 45% and 45% respectively. The co-construction rate should be not less than 30%, 40% and 35% respectively; and the sharing rate (tenancy ratio) of new tower sites should not be less than 75%.
13. Provincial broadcasting and television enterprises, broadband access network enterprises and other independent towercos should be incorporated into the corresponding co-build, co-share coordination agencies, and local departments should be invited to participate in co-build, co-share coordination mechanisms.
14. Strengthening the construction of information systems. The administrations should further improve the co-construction and sharing of telecommunication infrastructure in their regions, incorporating data on various infrastructure resources such as macro base stations, micro (small) base stations, indoor distribution systems, poles, roads and pipelines (ducts) into a unified resource database, and build a “map” of infrastructure resources.
15. Promoting open resource sharing. Opening public areas belonging to government organisations, institutions and enterprises to information infrastructure construction.
16. Strengthening supervision and assessment. The administrations shall intensify supervision, inspection, assessment and punishment of the joint construction and sharing of telecommunication infrastructure in its own area. The CITI will be authorised to organize random sampling of co-build, co-share of telecom infrastructure in 2019.
