Foreseeing 2022| 5G large-scale application "when the stars shine"

The famous biographer Stephen Zweig once said that once there is an important moment in history when the stars shine, it will determine the course of the next few decades and centuries.

By the end of last year, more than 5.29 billion independent users in the world had used mobile communication networks, 4.9 billion people used the Internet, more than 200 commercial 5G networks in 78 countries and regions, and 857 commercial 5G multimodal terminals (including mobile phones). The Global Organization for Mobile Communications Standardization (GTE) 3GPP named 5G Rel-18 and later versions as 5G-Advanced, further expanding productivity performance in multiple dimensions such as network evolution and technology enhancement, and striving to build a digital and intelligent infrastructure platform.

Looking around, the world's largest optical fiber network and 4G, 5G network, the number of 5G users exceeded 500 million, the Internet penetration rate exceeded 70%, and China led the global digital transformation tide in 2022 with absolute scale, absolute quality and absolute speed.

The release of 5G production capacity will be accelerated in 2022

The "14th Five-Year Plan for the Development of the Digital Economy" issued by the State Council proposes that by 2025, the added value of the core industries of the digital economy will increase from 8% to 10% of GDP in 2020. This means that with the blessing of the total economic scale of more than 20 trillion yuan, the integration of China's digital technology and the real economy will achieve breakthrough progress, the rules and order of the digital economy will be more perfect, and the competitiveness and added value of the digital economy will be steadily improved. Under the strong guidance of the national medium- and long-term strategy, more industry players, including telecom operators, Internet companies, digital technology companies and industrial enterprises, will improve operational efficiency and core competitiveness through measures such as increasing investment and digital transformation.

The just-held Central Economic Work Conference requires that in 2022, "moderately advance infrastructure investment" and "accelerate digital transformation and promote the upgrading of traditional industries", from macroeconomic policies to industrial application promotion, end-to-end release of the huge value of 5G as a production tool. Data is a new type of means of production, from the perspective of each unit of data traffic, 5G has the lowest cost, the "spillover effect" is the most significant, 5G will promote the high-quality development of China's economy in more ways, wider platforms and faster speed.

In 2022, the threshold of telecom operators' 5G packages is expected to continue to be significantly reduced, 5G mobile phones with a unit price of less than 1500 yuan will continue to be listed, and the state has issued a series of laws and regulations to increase the protection of personal data and user privacy, and more ordinary consumers can enjoy fast, cheap and secure 5G services. From the perspective of the development of China's 5G personal market, the huge data traffic dividend, mobile phone replacement dividend and digital life dividend brought by the second 500 million users will become the greatest certainty of China's economic stability.

Unlike traditional infrastructure such as expressways, which have a validity period of more than 50 years, the life cycle of information infrastructure is about 15 years. Therefore, the choice of technical path, the grasp of investment rhythm and the cultivation of customers must be well planned and accurately implemented.

Three strategic elements promote the high-quality development of the industry

In the face of the new macro situation and major structural opportunities in 2022, operators will continue to create a golden growth period for industry development driven by new strategic elements.

The first strategic driver is the "Digital Hu Huan Yong Line". The Hu Huanyong Line, also known as the "Heihe-Tengchong" population distribution line, proposed by the population geographer Mr. Hu Huanyong, is roughly inclined to a 45-degree basic straight line of China's territory, and 36% of the southeast of the line is inhabited by more than 90% of the population.

According to the seventh national census released in May 2021, the mainland has a population of more than 1.41 billion, and although the population concentration in the southeast has declined, the Hu Huanyong line is still the largest dividing line of China's social population and economy. Research by a number of research institutions shows that this line is roughly the dividing line of China's digital level, and the digital level of the vast majority of governments and enterprises in the southeast provinces (autonomous regions and municipalities) is significantly higher than the national average; while the northwest region of this line is overwhelmingly lower than the national average. The "Digital Hu Huanyong Line" has become a key strategic driving force for China to accelerate digital transformation and promote the development of the digital economy.

Under the guidance of industrial planning such as the Ministry of Industry and Information Technology's 5G application "Yangfan" action plan, in view of the imbalance of population and economic distribution, 5G network coverage, rel-17 new function introduction and system capacity can be focused on both sides of the "digital Hu Huanyong line". In the northwest, give full play to the first-mover advantage of digital industrialization, focus more on the network coverage of cities and key areas such as national defense, schools, transportation, factories and mines, and create the most cost-effective and ubiquitous infrastructure with super mobile broadband as the base. On the southeast side, new features and new performances such as low latency, high reliability, edge computing, Open UPF, 5G private network, super uplink and millimeter wave are more focused, and through higher investment density, traffic density and function density, we will create a high-performance, high-capacity and high-open industrial digitalization pilot demonstration zone.

Among them, satellite communications and ground 5G systems are integrated and networked, so that the "global village" expands from land to the sea and the starry sky, which is expected to become one of the hottest topics in 2022. China has included satellite Internet in its "new infrastructure." For the development of 5G and even 6G, Russia, South Korea, Canada, the United States and Europe have also included low-orbit high-throughput satellites in national or regional strategies to seize the global first-mover advantage. The rapid application of new technologies such as high-frequency bands, multi-beam, frequency multiplexing and software-defined networking enables everyone to use information services anytime, anywhere, and the all-digital era of 5G intelligent connection of everything is getting closer and closer.

The second strategic driver is "carbon dioxide". The global communications industry has long been committed to green development, and the "double carbon" white paper and action plan successively released by China Telecom, China Mobile and China Unicom have laid out a roadmap for the green and sustainable development of China's communications industry.

It is estimated that 5G networks will reduce carbon dioxide emissions by nearly 10 times their carbon footprint through system-level designs such as cloud-based deployment, software-defined networks, and distributed architectures. Based on the estimation of the annual electricity consumption of the three major operators of 30 billion kWh, it will produce an annual effective emission reduction equivalent to 300 billion kWh of electricity, and the total amount is very considerable.

At present, the transaction price of China's carbon market is about 1/10 of that of Europe, and the value is still seriously undervalued. At the same time, the carbon emissions trading markets opened around the world are unilateral markets, only pricing and trading on the amount of direct carbon dioxide emissions, and no trading on measurable third-party emission reductions. It is foreseeable that the return of China's carbon market price and the launch of the emission reduction market will bring significant economic value and social benefits to operators.

The third strategic driver is the "capital market". With the smooth return of China Telecom and China Mobile to A-shares, the three major operators have become companies listed on both china and overseas. The three-in-one of consumer market, capital market and resource market has made up for the last short board of the "wooden barrel" and opened up a new imagination space for the sustainable development of enterprises.

In the digital era, cultivating core high-level teams, building enterprise basic innovation capabilities and polishing platform-level strategic products is crucial, in addition to procurement and strategic alliances, capital markets and capital tools can play a larger, newer and more role, mergers and acquisitions, spin-offs, share swaps, etc. will become a new strategic implementation path, and the dynamic corporate governance mechanism will bring unlimited possibilities for operators' own digital transformation and value creation.

In the digital age, the solution to the problem is often beyond the problem. Facing the high-quality development period of the "14th Five-Year Plan", taking economic value, social value and ecological value as the benchmark, under the guidance of the national macro and information industry policies, driven by new strategic elements such as "digital Hu Huanyong line", "carbon dioxide" and "capital market", the communication operation industry will redefine and build a value growth system and move towards a new digital economy "new blue ocean".

In 2022, 5G will surely write a colorful chapter in the individual user and industry application market, and the "stars shine" in the digital era are on the road.

Author of this article

Ge Ji

Adjunct Professor, School of Economics and Management, Beijing University of Posts and Telecommunications

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Author: School of Economics and Management, Beijing University of Posts and Telecommunications

Adjunct Professor Ge Ji

Editor-in-Charge/Layout: Fan Fan

Review: Shen Qing

Producer: Liu Qicheng

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