China Mobile reveals 5G network expansion plans; China Telecom and China Unicom agreement on 5G network sharing

Lu Lu, a senior researcher at the China Mobile Research Institute, said in an industry speech last week that China’s largest wireless network operator expects its 5G network to reach 50 cities by the end of 2019 and 300 major cities by the end of 2020.  Ms. Lu said that China Mobile aimed to reach commercial scale in 5G by June next year and that 5G private networking will be a major new enterprise network service.  Edge computing, which was not used for 4G-LTE, was seen as essential for delivering customizable private networks, she said. The flexible architecture of the new 5G network was the critical factor, allowing for much more granular services and applications.

In addition, China Mobile is planning to offer network slicing services by the middle of next year when its standalone 5G network achieves commercial scale.  That despite no standards for network slicing interoperability between different vendors.

“At present, China Mobile has reserved hundreds of nodes in edge computing rooms. Based on these nodes and 5G networks we will carry out trials of relevant edge computing services,” Lu said. China Mobile and its partners hoped to provide “full-stack edge-computing capabilities to industry customers,” she added.

The Chinese telco is building a “one-stop cloud-network convergence platform” that can provide customized service capabilities in both centralized data centers and data centers at the edge of cities around the country, Lu said.  The operator has issued network slicing templates for six industry verticals — power grid, autonomous driving, gaming, entertainment, banking and medical.  In partnership with Ericsson, China Mobile exhibited a network slicing-based autonomous vehicle application at MWC2019 in Barcelona earlier this year.

Earlier this year, Ms. Lu delivered a speech to introduce the achievements of the cooperation between China Mobile, Huawei, and Baidu, and elaborated on the concept of “5G network as a service”. She also invited partners to jointly build the 5G ecosystem and continuously promote the maturity of 5G technologies and industry development.

China Mobile Executive Vice-President Li Zhengmao has said he believes private networking and network slicing offered some of the best prospects among new 5G services.

Operators can create a network-slicing-as-a-service business model, providing high-reliability, high-performance and easy deployment for the vertical industry through a centralized network slicing service platform,” he said in an interview with state news service Xinhua.

But he acknowledged that the lack of clear business models in industry partnerships was one of the biggest problems.

China Mobile has set up a 5G Joint Innovation Center to drive application development, with more than 500 industry partners and more than 400 vertical industry partners, Li said.

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Separately, China Telecom and China Unicom, agreed to share the efforts to build and maintain 5G radio access networks across the country.  The purpose is to accelerate deployment and slash associated infrastructure costs.

Each wireless carrier will be responsible for operating their own core networks, but will share spectrum resources and a single RAN network (which typically accounts for around 80 per cent of an operator’s capex). Under the agreement, the two companies will be individually responsible for construction and maintenance in specific regions.

In a statement China Telecom said: “The commencement of the co-build and co-share cooperation is beneficial to the efficient construction of [the] 5G network and will rapidly create 5G service capability to enhance network quality and business experience.”

It added the reduced costs would reinforce market competitiveness and achieve a win-win for both parties.

Both operators will continue to handle core networks and branding completely independently, with the collaboration only applying to the construction and ongoing maintenance of physical infrastructure assets. The network will use the companies’ combined spectrum.

In 2016, the operators collaborated on 4G network construction, a move which reportedly saved China Unicom millions in capex within the first year and helped the two better compete with the country’s largest operator, China Mobile.

References:

https://www.lightreading.com/mobile/5g/china-mobile-eyes-network-slicing-market-in-2020-/d/d-id/753963?

https://www.mobileworldlive.com/featured-content/top-three/china-operators-ink-5g-network-share-deal/

https://www.huawei.com/en/press-events/news/2019/4/huawei-china-mobile-baidu-5g-vertical-lan

China Wireless Carriers Consider 5G Partnership Amidst 5G Budget Constraints in 2019

Chinese mobile operators may be soon working together to build 5G networks in order to limit the costs, the Nikkei Asian Review reportsAnd why not- all three are state owned!

China’s second- and third-ranked mobile carriers, China Telecom and China Unicom area already close to an agreement.  Number one China Mobile hasn’t commented yet.  Please see China Mobile chairman’s statement in the last paragraph below.

China Telecom Chairman and CEO Ke Ruiwen said that his company is in “deep consideration” to jointly build a 5G network with China Unicom. He confirmed that top management on both sides have already reached a “high level of consensus” on the matter and “substantial progress” has been made toward a final deal.

Co-building and co-sharing would bring great savings in capital expenditure, operating expenditure, as well as improve resource utilization,” Ke said, without revealing any numbers that might quantify the cost savings.

The 5G partnership was hinted at by China Unicom Chairman and CEO Wang Xiaochu earlier. During the company’s first-half earnings briefing, Wang floated the idea of a “co-built, co-shared” 5G infrastructure. Wang left the door open to cooperating with China Mobile and China Broadcasting Network, which were granted 5G licenses in June, but said China Unicom was “mutually complementary” with China Telecom, noting their strengths in different regions of the country.

The Chinese government hopes that developing a 5G network will help buoy the economy, but the three major mobile carriers are concerned about expenses and profits.   © AP ………………………………………………………………………………………………………..

China Telecom’s Ke also mentioned these advantages at the operator’s first-half results presentation.  Although Ke dodged questions from reporters in Hong Kong about the savings on investment and when an official agreement would be signed, he confirmed that top management on both sides have already reached a “high level of consensus” on the matter and “substantial progress” has been made toward a final deal.

Both mobile carriers are limiting their 5G investment budgets this year. China Telecom is keeping its budget unchanged from the beginning of the year at 9 billion yuan ($1.27 billion), while China Unicom is holding within the previously committed range of 8 billion yuan.

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The chief uncertainty about such a 5G mobile carrier partnership is about exactly what facilities the operators would share? Making use of the same cell towers, poles and other “passive” infrastructure would be no great leap. Through China Tower-a jointly owned telecom infrastructure business- all three mobile network operators have already pooled mobile towers to reduce costs.

China Tower is  a joint venture of the three major Chinese mobile carriers. Chairman Tong Jilu told reporters on Aug. 7 that the cell-tower builder has not changed its annual capital expenditure budget of 30 billion yuan since the beginning of the year. Tong stressed that his company’s investment “is up to the telecom operators,” adding the annual investment “would not likely exceed the budget.”

China Tower said earlier this month that it had received client demands to install 65,000 5G base stations to date, a number that it expects to rise to 100,000 by the end of the year.

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Market leader China Mobile has pledged to allocate CNY 24 billion to 5G this year, above the CNY 17 billion suggested in March. Chairman Yang Jie said that its total capital expenditure for 2019 will be under CNY 166 billion, below last year’s CNY 167.1 billion.  The company’s 5G investment this year is much smaller than the 38.7 billion yuan reported by Chinese media when 5G licenses were granted in early June. The government aims to spur job creation and support embattled equipment suppliers like Huawei and ZTE as the trade conflict with the U.S. drags on, but the carriers seem to have their own agenda.

Despite the government’s push for swift deployment of a network, Yang said “the peak period of 5G investment will be between 2020 and 2022.”  This author completing agrees with that comment with the real investment not starting till 2021 after IMT 2020 RIT/SRIT standard has been completed by ITU-R.

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References:

https://asia.nikkei.com/Spotlight/5G-networks/Chinese-mobile-carriers-eye-sharing-5G-networks-to-curb-costs

https://www.telecompaper.com/news/china-telecom-unicom-consider-5g-network-partnership–1305741

https://www.reuters.com/article/us-china-telco-5g/china-telcos-weigh-sharing-5g-network-to-cut-costs-potentially-hurting-huawei-idUSKCN1VC17X

https://www.lightreading.com/mobile/5g/chinas-5g-market-has-teething-trouble/d/d-id/753657

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