China Radio and Television's "Excellent" and "Worrying" Development of 5G Business

China Radio and Television has been obtaining 5G commercial licenses for nearly 3 years, and is currently actively promoting the construction of 5G networks, while continuing to make efforts in 5G services, mobile broadband, high-definition video, Internet of Things and other fields based on good business foundations such as cable TV and video on demand. This paper analyzes the advantages and disadvantages of China Radio and Television's development of 5G services, the development ideas and development models of 5G services, and discusses the impact of China Radio and Television's entry into the 5G market on the telecommunications market pattern.

China Radio and Television develops 5G business

There are "joys" and "sorrows"

Content, spectrum, users, services, etc. have advantages

As a "new student" in the field of mobile communication operation and a "quality student" in the field of cable TV operation, China Radio and Television has advantages in developing 5G services in terms of content resources, spectrum resources and network coverage, user resources, and service systems.

In terms of content resources, China Radio and Television has rich video content (4K/8K video resources), program resources and media resource reserves of radio and television systems across the country, which have certain advantages in opening up vertical industry markets, and professional content output will provide strong support for the future development of 4K/8K video, cloud games and other applications. In addition, China Radio and Television has a national elevator Internet of Things radio and television multimedia broadcast control platform and a radio and television broadband TV integration platform, etc., which realizes the manageability and control of elevator media content and broadband TV content.

In terms of spectrum resources and network coverage, China Radio and Television has a 700MHz band known as the "golden band" and relatively complete transmission network resources. The 700MHz frequency band has the characteristics of low frequency, wide coverage, low propagation loss and strong penetration ability, which is suitable for large-scale continuous network coverage and can save a lot of network construction investment. It is estimated that China Radio and Television uses the 700MHz frequency band for 5G network construction, and only about 400,000 base stations are needed to achieve national coverage, while the three major operators need to build about 6 million base stations. At the same time, China Radio and Television, as the earliest institution to develop cable TV networks, has a multi-level network service system of provinces, cities and counties, and has achieved network coverage of most administrative villages and natural villages in China.

In terms of user resources, after years of development, China Radio and Television has accumulated a large number of TV user resources, and by the end of 2020, the national cable TV stock user scale has reached 207 million, hd and ultra-high definition users have exceeded 100 million, and intelligent end users have 29.85 million, laying the foundation for 5G service penetration. At the same time, as an operator with a state-owned background and a traditional mainstream media, China Radio and Television is deeply trusted by the government in the field of publicity and public services, which is conducive to its development in 5G-related business areas such as social governance and people's livelihood services.

In terms of service system construction, China Radio and Television divides the grid manager on the basis of roads, communities, user scale, and network structure, assigns the grid manager to be responsible for the marketing and service of TV users in the grid, and sets up a cross-departmental support team to centrally allocate the company's resources to achieve precision in products and services, and form an efficient grid marketing and customer service system.

There are hidden concerns about the network, business model, and operational experience

Although China Radio and Television has accumulated a certain foundation for the development of 5G services, it still faces problems such as the difficulty of integrating "one network in the country", the single business model, insufficient operational experience, and the lack of core resources.

The integration of "national one network" has not yet been completed. Due to historical reasons, the national radio and television cable TV network has not yet formed a centralized and unified operation, the external brands and images of cable TV network operators in various places are mainly based on me, there is no business management relationship between provincial companies and group companies, the phenomenon of "separation of princes" is obvious, and the entire radio and television system has not been able to form a joint force.

The business operation model is single and the user scale is declining. The existing business income composition of China Radio and Television mainly includes viewing and maintenance fee income, value-added service fee income, satellite landing fee income, program transmission fee income, broadband usage fee income, urban construction supporting fee income and network access fee income. Among them, the rating maintenance fee and value-added service fee are the main sources of income, the business structure is relatively single and the product competitiveness is not strong; at the same time, with the diversification of information sources and channels, the downward trend of cable TV users is obvious.

Lack of experience in mobile network operation and management. Before entering the field of mobile communications, China Radio and Television mainly operated cable TV and fixed-line broadband services, and lacked experience in network operation and maintenance, product design, and user services in the field of mobile communications.

Insufficient core resources. China Radio and Television has great deficiencies in basic resources such as equipment, funds and talents. In terms of equipment, China Radio and Television lacks facilities and equipment resources such as access networks, core networks, and bearer networks to carry out mobile operations; in terms of funds, China Radio and Television lacks a large amount of funds needed for frequency clearance and re-cultivation in the process of 5G network construction and national spectrum integration; in terms of talents, China Radio and Television has problems such as high-end talent loss, shortage of professional talents, and lack of transformation of professional teams.

China Radio and Television 5G Business

Development ideas

In 2020, China Radio and Television for the first time put forward the "circle center strategy" and "359" development concept of "user service-centric", emphasizing user-centered, market-oriented, rapid response services, accurate allocation of resources, etc. as the goal, building a simplified network and a flat organizational structure, focusing on the three major sectors of 5G, cable TV (broadband) and media content and innovative services, and making efforts in 5G co-construction and sharing, content innovation, and new operational architecture construction. Based on the business development ideas proposed by China Radio and Television, it is predicted that China Radio and Television will focus on making breakthroughs from the following three aspects.

Through co-construction, sharing, upgrading and transformation, the construction of 5G networks will be carried out rapidly

In the construction of 700MHz 5G wireless network, China Radio and Television has reached a co-construction and sharing agreement with China Mobile, and the construction cost is borne by China Mobile first, which greatly reduces the financial pressure of China Radio and Television's network construction and provides a guarantee for China Radio and Television to achieve full network coverage within two years. After the completion of the network construction, it is expected that China Radio and Television will carry out the "192" segment number through network leasing and carry out business operations through "cross-network roaming" and other means. At the same time, China Radio and Television will continue to deepen the integration of "one network in the country", promote the IP, cloud, intelligent and integrated transformation of the national cable TV network, and realize interconnection and interoperability with other operator networks.

Leverage multimedia to differentiate content and services

As a breakthrough point in the differentiated development with the three major operators, it is expected that China Radio and Television will vigorously develop 5G NR broadcasting services and focus on three formats. First, traditional TV channel broadcasting services: based on radio and television transmission towers and 5G cellular base stations, the basic one-way linear live broadcast of traditional TV channels on mobile intelligent terminals is realized in a wide area. The second is a new type of interactive video broadcasting service (main mode): based on 5G cellular base stations, intelligent cellular broadcasting of hot video content, providing TV channels to broadcast live games, e-sports, concerts, celebrities with goods, etc. Interactive all kinds of video broadcasting services, including various types of Internet live broadcasting, audio and video on demand, 4K/8K/AR/VR video services. The third is the integration of multimedia information broadcasting services: support public safety, emergency interactive broadcasting, V2X Internet of Vehicles, Internet of Things and other new multimedia information broadcasting applications.

China Radio and Television not only needs to give full play to the differentiated advantages of 5G NR broadcasting services, but also needs the support of high-quality high-quality content. CBS, HBO, Netflix and other foreign TV stations have been carefully deployed in the investment, production, broadcast and other aspects of high-quality content, thus winning a large number of users, and their experience is worth learning from the domestic radio and television system. At present, radio and television companies across the country have certain local content resources and license advantages, it is expected that China Radio and Television will gradually establish a national unified content aggregation and distribution platform by integrating resources such as content production, production, storage and distribution, and combine 5G NR broadcasting to provide users with immersive XR, ultra-high-definition real-time transmission and other innovative video services.

At the same time, we will make efforts to promote the market of individuals, families, enterprises and governments

China Radio and Television proposes to build a "TV + broadband + 5G + satellite live broadcast + X" all-media and fully integrated business system based on cable services and 5G services. It is expected that China Radio and Television will continue to improve the quality and user scale of radio and television broadband services through the "solid and top-fixing" approach, focusing on the development of broadband TV, smart home and other services, and through the "fixed tape shift" way to penetrate into mobile services, extend the development of video, cloud services, games and other services.

At the same time, China Radio and Television, as a "party media and government network", is also a shareholder of large enterprises such as State Grid and Alibaba, and is expected to expand in specific application scenarios of enterprises and governments, including party and government, smart city, public security, public services, social governance, power grid, e-commerce, agriculture, digital villages and other wide coverage scenarios.

China Radio and Television and Operators

Cooperation

At the beginning of 2022, China Radio and Television Network Group Co., Ltd. and China Radio and Television Network Co., Ltd. registered and established China Radio and Television Mobile Network Co., Ltd., which is professionally responsible for the unified operation of 5G business, but the competition and cooperation model on the market side has not yet been clarified, and it coexists with the other three basic operators. It is predicted that China Radio and Television will subdivide regions and cooperate with the three major operators in areas with low conflicts of interest; and carry out regular competition in other regions.

Co-build and share with China Mobile on the network side

The current cooperation between China Radio and Television and China Mobile is mainly to build and share 700MHz wireless networks on the network side, and there is no cooperation dynamic on the market side. According to the agreement, China Mobile will bear all the network construction costs first, and China Radio and Television will pay the network usage fee to China Mobile in the form of network leasing or traffic settlement; later, China Radio and Television can purchase 50% of the relevant assets of the 700MHz wireless network from China Mobile in stages according to the valuation and agreement. As a result, the pressure on china's radio and television network construction has been greatly reduced.

Launched a fusion product with China Unicom

Since 2018, China Radio and Television and China Unicom have successively reached cooperation in Hebei, Hunan, Jiangsu, Qinghai and other provinces. In November 2021, China Radio and Television Inner Mongolia Network Co., Ltd. signed a strategic cooperation agreement with China Unicom Inner Mongolia Branch to launch exclusive integration products based on the business advantages of both sides, which have the advantages of low price and rich media content, and have strong competitiveness in the market.

China Radio and Television entered the 5G

Analysis of the impact on the telecommunications market pattern

Differentiated content has basically no impact on the market landscape

High-quality live TV content is not the exclusive resource of radio and television networks, and traditional cable TV does not have a content advantage. Therefore, in general, the development path of "DVB+OTT+5G" is not very competitive in the market.

Specifically, the first is that the live broadcast channel in terms of content is not exclusive. CCTV 3, 5, 6 and 8 boutique channels are widely licensed and authorized, and are exclusively owned by non-radio and television. Second, television has gradually become pipelined. The number of user activities on short and medium-term video platforms has surged, and production models such as OGC (professional), PGC (professional), and UGC (users) have matured, and cable TV will inevitably be piped. Third, the scale of cable TV subscribers has declined. Although cable digital TV strives to upgrade to optical fiber and IP, it has gradually been recognized by young people due to the continuous erosion of IPTV, OTT and mobile Internet; even if the DVB+OTT model sets up Internet video zones, independent APK, etc., and cooperates with CP/SP parties to launch DVB+OTT fusion set-top boxes or vertical field TV terminal products, it is difficult to stop the downward trend.

In addition, from the perspective of the industrial chain, the radio and television system is not only the upstream supplier of the content of the three major operators, but also a competitor in the transmission and broadcast control and other links. The radio and television group needs to be gradually integrated from top to bottom, involving the interests of companies in various provinces and cities, and there are many problems in the process of resource integration.

5G broadcasting has an important impact on 2C traffic operations

In the R17 version, 3GPP has been approved to support 5G NR broadcasting services, allowing users to watch radio and television programs or enjoy data services anytime and anywhere. 5G NR broadcasting can transmit multiple channels of 1080P HD video/4K ULTRA HD video, which is not limited to the operator network used by the user, nor does it consume any audio and video data communication traffic. After supporting the Free-to-Air model, China Radio and Television will achieve a SIM-free card-free reception model, which will have an important impact on the traffic operation of China Telecom, China Mobile, and China Unicom's future to C services, but the specific impact also needs to be considered comprehensively in combination with audiovisual content, terminal types, package tariffs, signal coverage and other factors.

In the future, 5G universal terminals can receive 5G broadcast signals transmitted under the same wireless resources. There are two ways to achieve this function: one is based on 5G cellular base stations, mainly 480,000 5G base stations jointly built and shared with China Mobile for broadcast signal transmission; the other is to transmit 5G broadcast signals through radio and television transmission towers, mainly central towers, which can realize that even if the user's mobile phone does not have a SIM card, it can receive broadcast signals.

Convergence of business models or encroachment on the 5G low-end market

China Radio and Television's "TV + Broadband + 5G + Satellite Live Broadcast + X" fully integrated service system has a limited impact on the current operator stock market, and has a certain impact on the new markets of home wide and TV and 5G low-end, but the impact cycle is relatively long, and the three major operators have sufficient response time.

In the home broadband market, the national household broadband penetration rate will be 34.3% in 2020, and the broadband market still has a large room for growth. From the overall point of view, in the early stage of the development of China Radio and Television, there was no obvious advantage in network speed, quality, and brand image marketing, but low-price competition would still divert some new scales. Under the background of the acceleration of "digital villages", it is expected that the effect of market diversion in rural and remote areas will be more obvious.

In the IPTV market, the overall growth of IPTV TV business is good, but based on advertising payment, content payment, traffic distribution, e-commerce and other models, OTT will gradually become the "main track" of TV screens. From the perspective of the development trend of mobile Internet and the development direction of the three major operators, IPTV will gradually switch to OTT, and the degree of restriction on the supply side of large-screen content by radio and television content licenses will also decline.

In the 5G user market, due to the basic saturation of the mobile to C market, China Radio and Television will use the "fixed belt shift" model to grab users, but China Radio and Television has a large gap in terms of funds, operation and management capabilities, personnel team, technical capabilities, etc., and cannot quickly make up for the shortcomings in a short period of time. Therefore, in the short term, the market pattern of 5G users will not change much.

This article was first published in The World of Communications

Issue 6, March 25, 2022 Issue 892 in total

End

Author: China Mobile Communications Group Guangdong Co., Ltd

Customer Operation Center Ye Xuan

Editor-in-Charge/Layout: Fan Fan

Review: Shen Qing

Producer: Liu Qicheng

I knew you were "watching"