China Telecom to accelerate 5G deployment; 100% Fiber network coverage; Gigabit fiber broadband deployment
According to its latest financial report published today, China Telecom has big plans for 5G. The report states in part:
New technologies represented by 5G and AI are integrating and evolving, enabling them to support supply-side structural reform, which will lead to a rapid expansion of potential value for digital economy. As the next generation infrastructure, 5G network will become ever more intertwined with applications and telecom operators will play an increasingly pivotal role in the information communications industry. The Company (China Telecom) will actively explore commercial applications of various new technologies, accelerate the development of operation mechanisms that are adapted for 5G, and capitalize on its advantages to promote ecological services ahead
of time.Recently, China Telecom was awarded the 3.5GHz band to conduct nationwide 5G network trials. Leveraging the advantages of the 5G mainstream frequency band and insisting on open cooperation, the Company will accelerate 5G deployment proactively and pragmatically. Persisting in a market-oriented and demand-driven approach, the Company will appropriately manage the momentum, propel the development of non-standalone (NSA) and standalone (SA) concurrently, and progressively expand the scale of network trials and the pilot project of 2B/2C applications.
In a presentation on its 2018 financial results, China Telecom noted these 5G milestones:
1. Technology:
• Published industry’s first 5G Technology White Paper
• Launched industry’s first 5G+AI handset standard
• Pioneered to accomplish 4G-5G interoperability on SA network architecture
• Pioneered to interoperate 5G SA (Stand Alone) on equipment from different vendors
2. Extensive Application Trials:
• Internet of Vehicles (IoV): 5G-based remote-controlled driving in Xiong’an and passed test
• Media convergence: Ultra-high definition 5G 4K, VR live broadcasting of gala show
• Smart city: 5G full coverage along a 28km road in city area, performing data traffic management for ultra-high definition 5G+, cloud VR and 5G smart transport
• Energy Internet: Trial on IoT electricity distribution leveraging 5G network slicing (?), performing 5G precision control on electricity distribution and usage
3. Network Capability- Prepare for flexible and agile 5G deployment with:
• Prompt assessment and modification of existing network
• Acceleration of network cloudification and intelligent upgrade
• 100MHz spectrum at 3.5GHz band, which has the world’s most developed industry chain for 5G trial
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China Telecom plans to accelerate 5G development pragmatically:
• Persistence in SA as the goal and direction, to expediate industry chain maturity and conduct scale trials in SA/NSA which is concurrently in a very early stage
• Adjust investment plan and expand trial subject to technology maturity, licensing, market competition and results of scale trial
• Actively explore network co-building and co-sharing to reduce network construction and maintenance cost
Open co-operation initiatives include:
• Promote key 5G technology researches, actively participate in formulating 5G international standards and foster end-to-end development of industry supply chains
• Collaborate with customers and business partners for innovations, enrich products and applications
• Work with industry to commence trials on smart city, autonomous driving, industrial Internet, entertainment, medical service, education, etc.
The Company has modified its R&D system to enhance the R&D capability of key technologies of strategic, pioneering and fundamental importance, such as 5G, network capability, AI, etc.
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In its SEC Form 6-K the company wrote: 
- Focusing on user experience, business scale expansion and value management, the Company pushed forward the construction and intelligent upgrade of its network to build up comprehensive network advantages.
- Leveraging big data analysis, we deployed dynamic capacity expansion of 4G network with precision, and further optimized in-depth coverage at key locations.
- The number of 4G base stations reached 1.38 million, effectively supporting the upgrade to VoLTE high definition voice, as well as the continuous growth of large data traffic business.
- Our fiber network now fully covers all cities and towns in the service area of the Company, enabling a leading customer experience. By leading the deployment of Gigabit fiber broadband, we established a new edge in broadband network.
- We continued to enhance our NB-IoT network, and built a whole-range speed rate IoT structure, which combines high, medium and low speeds, supporting further expansion in vertical industries.
- By pushing forward cloud-network integration at full throttle, we continued to optimize our nationwide deployment of cloud resources and backbone network coverage, resulting in the establishment of a cloud-led network.
- By introducing new technologies such as Software-Defined Networking (SDN) and Network Functions Virtualization (NFV), the Company accelerated the re-constitution of its networks, and rolled out scale promotion of intelligent self-selecting bandwidth network products for government and enterprise customers as well as home gateway products based on SDN technology, which allows our network products to be activated within minutes.
- We also launched a VoLTE virtual IP Multimedia Subsystem (vIMS) core network with software and hardware decoupling, facilitating the progress of cloudification and virtualization. This significantly strengthened our competitiveness and differentiation in the cloud market, while laying a foundation for 5G network cloudification in the future.
- The Company proactively contributed to the formulation of international standards for 5G technologies and conducted large-scale 5G network trial runs in a number of locations.
- We achieved some preliminary progress in areas such as 5G voice call, 4G/5G interoperability, and interoperability between (pre-standard 5G) equipment, among others.
- By supporting the Ultra HD Live broadcast for CCTV’s 2019 Spring Festival Evening Gala with “5G+4K” and “5G+VR” solutions, we took an important step towards the successful accomplishment of enhanced mobile broadband (eMBB) application scenarios.
- The Company also actively explored applications for other vertical industries, such as 5G autonomous driving bus, smart water treatment and mobile remote medical service.
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China Telecom’s CAPEX is expected to increase 4% this year, to roughly RMB78 billion ($11.6 billion), after dropping 7.9% in 2018. That will include a 21% increase in spending on “information and application services,” to about RMB10.5 billion ($1.56 billion), as China Telecom prepares for its 5G future.
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In a paper published last August, consulting company Deloitte said China had outspent the US on 5G-supporting infrastructure by around $24 billion since 2015. Last year, the 1.9 million mobile sites across China worked out at 14.1 for every 10,000 people. With just 200,000 sites, the US had an equivalent ratio of just 4.7, according to Deloitte. Catching up with China in 5G may be “near impossible” for the Americans, Deloitte said in its report which we summarized for the IEEE Techblog.
In a recent Lightreading.com blog post, Iain Morris wrote:
With its huge population and model of state capitalism, China could be a fertile testing ground for new 5G applications. China Telecom alone had a staggering 303 million mobile customers at the end of last year — an increase of 53 million on the number in 2017 — including 242 million on 4G networks. Revenues were up 3%, to RMB377.1 billion ($56.2 billion), thanks to customer growth, and net profit rose 14%, to RMB21.2 billion ($3.16 billion).
Seeking advantage in AI, China’s government will undoubtedly look for support to a such a large, financially stable organization, with its vast reserves of customer data and stake in 5G. Demographics and democracy make the task much harder for US authorities worried about falling behind in the new technology arms race. Amid recent political talk of building a nationalized 5G network, the US operators may be under government pressure on a generation of mobile technology like never before.
Editor’s Note: Mr. Morris strongly asserts that China Telecom said it will be a leader in delivering 5G low latency (which will be specified in 3GPP release 16- due to be completed in 2020 and later in ITU-R IMT 2020 for ultra low latency.high reliability use case). He wrote, “China Telecom said it will be “industry leading” in latency, a signaling delay that could become a new battleground for 5G competitive advantage.” However, we have NOT found that reference to latency in any of China Telecom’s reports (see highlights above) and presentation made today (March 19, 2019).
The 5G-IMT2020 radio access network latency objectives, which Ericsson and others often say will faciliate many new applications, are specified in ITU-R M.2410-0: https://www.itu.int/dms_pub/itu-r/opb/rep/R-REP-M.2410-2017-PDF-E.pdf
The minimum requirements for user plane latency are: 4 ms for eMBB and 1 ms for URLLC assuming unloaded conditions (i.e. a single user) for small IP packets (e.g. 0 byte payload + IP header), for both downlink and uplink.
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There is no spec or even target for cloud network latency related to carrying 5G packets. In fact, the cloud network might not be used at all for real time control of 5G applications such as V2V or IoT
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China’s carriers dig deep for world-beating 5G
China’s carriers are starting their long ascent to the 5G spending peak. Two of the country’s three largest mobile providers have indicated how much they will pay for the initial buildout of next generation technology this year, the first real hint of how they might approach a huge project being rolled out with a push from Beijing. Costs look manageable for now, but investors are not in the clear.
https://www.nasdaq.com/article/chinas-carriers-dig-deep-for-worldbeating-5g-20190321-00245
From MIT Tech Review:
In its 13th Five-Year Plan the government describes 5G as a “strategic emerging industry” and “new area of growth,” and in its Made in China 2025 plan, which outlines its goal of becoming a global manufacturing leader, it vows to “make breakthroughs in fifth-generation mobile communication.”
Clearly, China is serious about making this work—and on an epic scale. China sees 5G as its first chance to lead wireless technology development on a global scale.
In a TV interview, Jianzhou Wang, the former chairman of China Mobile, China’s largest mobile operator, described the development of China’s mobile communication industry from 1G to 5G as “a process of from nothing to something, from small to big, and from weak to strong.”
Money is another good reason. The Chinese government views 5G as crucial to the country’s tech sector and economy. After years of making copycat products, Chinese tech companies want to become the next Apple or Microsoft—innovative global giants worth nearly a trillion dollars.
The China Academy of Information and Communications Technology (CAICT), a government-run research institute, estimates that 5G will create more than 8 million jobs domestically by 2030. The agency thinks major industries, including energy and health care, will spend billions of dollars collectively on 5G equipment and wireless service during that period.
The government controls all three of the country’s mobile operators (China Mobile, China Telecom, and China Unicom) and has been “guiding” them to deploy large-scale 5G test networks in dozens of cities, including Beijing, Shanghai, and Shenzhen. China Mobile claims that its tests alone represent the world’s largest 5G trial network.
Under government direction, Chinese companies began conducting research on 5G in 2013 and holding technical trials of related technologies in 2016. “Chinese operators see their job as implementing government policy, whereas most global telecom companies try to balance competitive factors and will naturally invest at a slower pace,” says Chris Lane, a research analyst for investment management firm Sanford C. Bernstein.
Beijing has also committed to giving Chinese operators large chunks of spectrum for 5G. That’s a far cushier arrangement than operators enjoy in the US and many other countries, where they pay regulators billions of dollars for the right to use slivers of spectrum. These radio frequencies carry wireless signals and are critical to cellular service, especially 5G, which will need wide swaths of bandwidth to provide users with super-fast speeds.
https://www.technologyreview.com/s/612617/china-is-racing-ahead-in-5g-heres-what-it-means/
China Telecom has been outperforming its larger rivals China Mobile and China Unicom in recent quarters, driven by its higher 4G coverage and its launch of new plans targeted at heavy data users.
China Telecom added a total of 20.5 million users, compared to 10 million for China Mobile and 9.3 million for China Unicom.
China Mobile remains the undisputed leader in terms of overall wireless subscribers, with over 930 million subscribers, while China Unicom is a distant second with 324 million subscribers.
China Telecom looks set to overtake China Unicom in the coming months. China Telecom has seen the most consistent subscriber additions, with an average of almost 3 million adds a month.
Conclusions:
1. While China Telecom looks set to replace China Unicom as the second largest carrier, it is possible that its growth could slow going forward, due to increasing saturation in the Chinese wireless market.
2. That said, its higher base of high-speed data users could help drive its performance as the industry transitions to 5G.