What is the $12 trillion and 300 billion that 5G brings?

Original title: how can 5G earn $12 trillion and 300 billion?

This year, the 5G scale test is carried out.

It is pre commercial next year and is officially commercially available in 2020.

What is the $12 trillion and 300 billion that 5G brings?

In December 3, 2017, the fourth World Internet Conference World Internet leading scientific and technological achievement was held in Wuzhen, Zhejiang. HUAWEI Technology Co., Ltd., CEO Xu Zhijun, introduced HUAWEI 3GPP 5G scientific and technological achievements. Picture / Xinhua

2018, the first year of 5G

Wen / Yang Zhijie

Today, we enjoy the huge bonus of 4G every day – live broadcast, video calls, mobile payments, Internet taxi, mobile games and so on, all of which benefit from the increase in the speed of the wireless network. Liu Guangyi, the chief engineer of the Research Institute of wireless and terminal technology at China Mobile Research Institute, participated in the research and development of 4G. At that time, the mobile phone was used only to call, send text messages and browse web pages. He never thought that with the development of intelligent terminals, 4G was rapidly popularized, and the behavior habits of people using mobile phones had changed completely.

With the happy life brought by 4G, people especially expect 5G (the fifth generation mobile communication system). In 2018, all the topics about 5G were hot, and people seemed to hear the footsteps of 5G – as planned, the final formulation of the 5G standard would be completed in 2020.

Recently, what Liu Guangyi is most concerned about is whether the first version of the first full version of 5G, Release15 (R15), can be frozen on time. His team took part in China Mobile’s 5G research and development.

Standard formulation: competition and cooperation

In accordance with the most important 5G international standards, the organization for the organization of 3GPP (Third Generation Partnership Plan) work schedule, in June this year, the R15 technical standards freeze, which means that the next step HUAWEI, NOKIA and other equipment manufacturers can follow the standard product development, telecom operators began to deploy. 5G has gone through the stage of the industry’s “pie” in the past few years, and is a step closer to business.

The communications industry has a jargon: first-class enterprises sell standards, second class enterprises sell patents, and three generation enterprises sell products. If their own scheme is finally incorporated into the 3GPP standard, there will be more voice in the future development of 5G. The process of submitting proposals is naturally a game.

“The competition of 5G first reflects everyone’s participation in the formulation of standards. Competition in this field is sometimes fierce, and it may even be life and death.” Liu Guangyi once represented China Mobile in the 3GPP conference. The members of the organization include network operators, terminal manufacturers, chip manufacturers, basic manufacturers, academics, research institutions and government agencies. Members propose different solutions and technologies at the 3GPP conference in accordance with their own market needs and technological developments, followed by on-the-spot discussions.

Liu Guangyi was impressed by the China Mobile team being on the scene to show his proposal on the format of the wireless signal transmission through a large screen, and the chairman was sitting on the platform. As soon as they finished the proposal, a representative of the equipment dealer rose and raised objections and asked questions. “This equipment manufacturer has already had a patent in this technology, and they feel that if you decide another format, I will make one more in the future. From the perspective of terminal base station construction, the development of resources and input will increase, and the complexity of testing will also increase. At the same time, there is a new format for companies with patents. Their original intellectual property rights are not necessarily elected, which will affect the value of the company. At this point, others will try to stop you from writing. ” Liu Guangyi said.

Zhang Ping, director of the National Key Laboratory of network and exchange technology at Beijing University of Posts and Telecommunications and a member of the expert group of the IMT-2020 (5G) propulsion group, said that the fierce competition for standard formulation is normal. Each proposal represents the interests. Most of the proposals are not irreplaceable. There are many choices. This is the whole standard system. Whether your standards are complete or systematic, of course, there are also some human factors.

It is often the case in standard setting that few proposals are irreplaceable, so a technology is faced with competition in 3GPP, so each member will argue over the details and game on the front desk and backstage. If everyone agrees on the scene, the chairman will write the proposal in the minutes of the meeting. If the dispute is greater, the chairman will suggest that we continue to discuss the matter after the meeting and form a consensus and continue to present it at the conference. “But the final decision is still driven by technology, and there will be a game of compromise and a compromise process.” Liu Guangyi said.

Moor Insights &, a marketing research firm, and Patrick Moorhead, founder and chief analyst of Strategy, said that a quality proposal is more important than a company that is more proud of the number of proposals. The importance of the proposal lies in the extent to which it can promote the development of the mobile ecosystem by expanding the new characteristics and fields of the ecosystem.

Domestic enterprises such as HUAWEI and ZTE are also involved in the formulation of 5G related technical standards. At the 87 meeting of 3GPP RAN1, the vote on 5G short code was called “war without smoke.” In November 16, 2016, the discussion of the conference was extremely intense. Almost all companies were involved in the discussion of the plan. The next morning, the next morning, HUAWEI’s Polar Code (polarization code) scheme obtained more approval, which was confirmed by 3GPP as the 5G control channel eMBB (enhanced mobile broadband) scenario coding scheme, competing with the LDPC of the United States and the French main push Turbo2.0. Previously, LDPC has been recognized as a coding scheme for data channels.

The recent controversy over Lenovo Group on social networks is the vote of HUAWEI’s polarisation code two years ago.

The global securities and investment bank group, Jack, released the geopolitics of telecommunications services – 5G and IoT (the Internet of things) in September last year, which focused on the changes in China’s status in 5G research and development. The report concluded that as of early 2017, 10% of the 1450 major patents in the 5G network were Chinese, and they expected that figure to rise. This includes intellectual property rights of HUAWEI and ZTE and other enterprises. The report also pointed out that only Qualcomm one family had 15% 5G patents, NOKIA accounted for 11%, Ericsson accounted for 8%.

From the history of mobile communications, although China is the world’s largest mobile market for users and network scale, Qualcomm, NOKIA, Ericsson, Samsung and LG have dominated the mobile communications technology in the past. China has no right to speak in the era of 2G and 3G. At present, it has such a growth rate in the age of 5G, which makes foreign countries have to pay special attention to China’s competitors.

In the middle of April, the CTIA report, published by the American wireless communications and Internet Association (CTIA), mentioned in the 5G global competition report that countries such as China, Korea, Japan and Japan have shown outstanding performance in the preparation of 5G, and China is in the lead. These countries understand that leadership in the wireless field means billions of dollars in economic growth and employment opportunities in millions of future industries.

Zhang Ping’s experience over the years reflects the change of Chinese discourse power from side to side. When he first attended the 3G International Standardization Technical Conference on behalf of the state, he was the only representative of technology except the Chinese government. He used 3 “S” to describe the situation in which the Chinese team met abroad at that time. “Smiling – everyone with a smile, Silence – keep silent, Sleeping – talk about it, because there’s nothing to do with the Chinese.” But he finds that many Chinese companies and organizations are now attending the 3GPP meeting, or even many of them are chairmen of the working group.

Liu Guangyi used Pyramid to describe the composition of 5G industry chain participants. At the top of Pyramid is AT& T, China Mobile, and South Korea’s SK operators, followed by equipment vendors that can provide base stations, terminals, transmission equipment, core networks, and so on. The next is the components of a module that produces chips and base stations, and then the upstream supply chain of the components, and so on. Together, a closed loop industry chain is formed. Many enterprises in these industrial chains have been involved in the struggle for 5G standard in order not to be left behind.

Competition on the 5G battlefield also exists in every layer of Pyramid. For example, there are only 5 companies in the world to do 5G base stations, such as China’s HUAWEI, ZTE communications and Datang Telecom, Sweden’s Ericsson, and NOKIA in Finland. According to reports, HUAWEI invested 4 billion yuan in 2017 to develop products, and this year’s investment in product development will exceed 5 billion yuan. Since 2017, ZTE has invested 2 billion yuan for 5G research and development. Who is the first to develop, whose performance is better, who will be more likely to get large orders from China, the United States and South Korea, and get huge profits in the future.

But Liu Guangyi believes that the more accurate statement of the race should be competition and cooperation. “Everyone has a common goal – how to make the 5G successful, it needs to work together to create a better industrial environment, to make the cake big, so that you can share a lot, this is also competing relations.”

Despite competition, the unification of 5G standards is also a trend. Looking back to the history of the development of the communications industry, there are two technical standards for GSM and CDMA in the 2G era; there are 4 in the era of 3G, WCDMA, CDMA2000, TD-SCDMA and Wimax; 4G is developed into a LTE standard with two types of FDD and TDD, and these two kinds of more than 90% technologies are the same.

In the entire mobile communication industry chain, operators are in the upstream and the entrance of the entire capital. The equipment manufacturer’s money comes from the operator, and the equipment manufacturer is also the customer of its upstream device supplier. “If China Mobile can’t earn money from the market, there will be no money flowing in the ecological chain. Without cash flow, the problem is coming. Where does the money come from? In this way the entire ecological chain is dried up. The food chain is broken. ” Liu Guangyi said, “if other operators see China Mobile can succeed, they can also copy, so that the market will become larger and larger. Everyone is a grasshopper on a rope. On the industrial ecological chain, you have me, I have you, I can’t do without anyone. “

In an interview with China Newsweek, HUAWEI mentioned that they would highlight HUAWEI’s main role in communicating with customers, in order to make customers more confident about HUAWEI. But in the overall development of 5G, Queenie Chu, chief marketing officer of HUAWEI 5G product line, said HUAWEI did not want to enlarge its aura. “The communications industry has been alone and monopolized. So we do not want to emphasize that we have the greatest contribution, but in fact it is the result of joint cooperation.

What is the $12 trillion and 300 billion that 5G brings?

China is an important competitor and partner in the global 5G industry. Figure /fotolia

5G business: steady progress in the world

Liu Guangyi presented China Mobile’s 5G infrastructure proposal in 2017 and 2018 to China Newsweek, the latest version of which was published in the World Mobile Communications Conference (MWC) in Barcelona in February.

Operators, combined with the standards of 3GPP, solidified their understanding of 5G in the proposal, as large as the framework, small to the base station, terminal, core network and other specific technical parameters are carefully listed. Liu Guangyi compared the operator’s understanding of 5G to “building a house”, first building a frame, then dividing the house, adding top, considering the position of windows and doors, and considering other decorations. This is a process from coarse to fine. He explained that the proposal played a guiding role in the upstream equipment manufacturers.

At present, the NDRC has approved the construction of 5G network by three major domestic operators in some cities. China Mobile lists specific product requirements, and equipment manufacturers and their upstream suppliers must produce products that meet the requirements above to get the operator’s orders. These products were put into the pilot cities to verify the feasibility of the 5G network technical parameters formulated by the operators. “Equipment vendors must develop products according to our requirements, so the sooner they follow us, the sooner their 5G’s things are developed.” Liu Guangyi said.

In May 12th, Wang Zhiqin, head of the China 5G propulsion group and vice president of the China Institute of communications and communications, released the 5G innovation and development report. According to her, 5G is now entering the key stage of international standard setting. In June this year, the independent networking 5G new opening and 5G oriented next generation core network NGC standard will be completed. It will support the enhancement of broadband and the development of the 5G. Low time delay and high reliability scene. Next September, the 5G system will meet all technical requirements of ITU for 5G.

Until the R15 standard freezes, participants on the 5G ecosystem chain can develop products according to the final version. The next step is to wait until the terminal chip is developed, and the smart terminal will soon take shape, and the 5G business will be ready.

At present, the three major domestic operators have announced the 5G timetable, their planning is basically the same: this year, the 5G scale test will be carried out, and the business will be commercially available in 2020.

According to Wang Zhiqin, with the unified development of the whole standard and spectrum ecological environment, countries have also made clearer and quickened the business application process of 5G. The United States, Japan and South Korea will deploy the 5G application test network in 2017~2018 years, and will deploy the equipment in line with the international standard of 5G in 2019. Europe also carried out the 5G technology experiment in 2018.

In the process of steadily promoting 5G in the world, the government is also a force that can not be ignored. The “white paper on the economic and social impact of 5G” published by the China Institute of information and communication in 2017 mentioned that the effective use of information and communication technology has become an important driving force for efficiency promotion and economic structure optimization. It is accelerating economic development, improving the existing industrial labor productivity, the new growth points of the Pei Yuxin market and industry, and achieving inclusion. Sexual growth and sustainable growth are playing a key role.

In May 2nd, US Commerce Minister Wilbur Ross publicly said that building the 5G mobile network is the first task of the Trump administration and that the United States needs 5G, whether for defensive purposes or for commercial purposes.

High pass 5G industry report predicts that by 2035, 5G will create $12 trillion and 300 billion in economic output around the world, and the global 5G value chain will create $3 trillion and 500 billion output and create 22 million jobs. The average value chain of 5G will be invested 200 billion US dollars per year, which will support the long-term sustainable growth of global GDP. Qualcomm expects that between 2020 and 2035, 5G’s contribution to global GDP growth will be equivalent to that of an economy of the same size as India.

From the beginning of the 5G, it is no longer just serving people, with the emphasis on linking things and things. Governments have promoted the development of 5G to a strategic level.

The EU issued the EU 5G declaration in July 2016 to promote the timely deployment of the fifth generation mobile communication network in Europe, which will develop 5G as a key measure to build a “single digital market”, which aims to lead the European business deployment in 5G networks ahead of the world.

The 5G strategy released by South Korea has proposed to invest about $1 billion 430 million and launched the 5G pre commercial trial by South Korea Telecom during the Winter Olympics in Pingchang.

The Chinese government is no exception, “actively promoting the fifth generation mobile communications (5G) and ultra wideband key technology research, starting the 5G business” is included in the “13th Five-Year” plan.

Liu Guangyi told China News Weekly that the government has seen the driving effect of the mobile communication industry on the whole society, so it is hoped that in the process of the development of 5G, it will not only drive the interconnected industry, but also drive the manufacturing industry, which is immeasurable for the development of the country.

5G hot behind: how do you make money?

It is easy for people to create the illusion of 5G when they are widely publicizing the revolutionary prospect of 5G and connecting with the application scenarios of everything. However, in April 17th, HUAWEI CEO Xu Zhijun’s HUAWEI global analyst conference, held in Shenzhen, said that while 5G technology was faster and more reliable, consumers would not find a substantial difference between 5G and 4G technology. He also said that most consumers would not notice the benefits of new technologies, and operators would also be hard pressed to make money from them.

What is the $12 trillion and 300 billion that 5G brings?

In April 21st, exhibitors displayed high-speed D/A converters for 5G communications at the first digital China Construction Achievements Exhibition in Fuzhou, Fujian province. Graph / New

Although the 5G technology standard is constantly advancing and the international competition is fierce, Xu Zhijun has spoken out the voices of some people in the industry, and has also touched the pain point of the operators.

Liu Guangyi also believes that at present, global suppliers are facing the same problem: how can 5G make money? “This is equivalent to the arrangement of 5G, but at present it is very difficult to have new business mode to make users willing to pay more. The government also calls for a continuous reduction in fees, so the return on your investment will gradually become pessimistic. Are you still willing to build a new base station for 5G? “

Liu Guangyi analysis says that you have increased investment, but will not earn more money from users, and can only hope for the vertical industry. However, the expansion of the vertical industry is a long-term process. At the same time, the government wants the operators to build a large number of 5G networks from the national strategic level. Operators are facing a very real problem: if they can’t earn money, how should they be refunded?

This uncertainty makes operators lack the confidence of large-scale 5G network construction. Because the 5G bandwidth is widened, the Massive MIMO and the number of antennas are increasing, so the transmission network and core network must be changed. In addition, the frequency of 5G is high and the radiation radius of base station is smaller. If we want to increase network coverage, we need to increase the number of base stations. On the whole, the cost of building 5G network needs to be improved.

The pain point of operators is entirely understandable to Zhang Ping. In the coming 5G era, China Mobile is faced with a shift in its role and profitability. In the past, China Mobile mainly made profits from consumers, but in the future, it was not only people but also objects. He mentioned that in the 4G era, many value-added businesses were subverted because of the emergence of mobile Internet. “For operators, it has been marginalized, and operators have become an information channel. There are many other channels of interest in the whole society. So 5G is also a test for operators. “

The situation of operators is similar to that in the United States, and there may be new difficulties from other sources, such as the rising price of tower rents. Fierce Wireless, a foreign website, recently reported that the 5G era is getting closer and closer. Compared with the existing base station antennas, Massive MIMO, which was first used in 5G, is more likely to have a larger size and weight than the existing base station antenna, so many Tower Companies in the United States are likely to charge higher rents to the operators.

“From the history of mobile communication development, network coverage and business penetration are two complementary aspects. If there is no coverage, business penetration will be slow, and the entire 5G business will develop very slowly. ” Liu Guangyi said, “5G is really facing a problem. Is the operator confident to earn the money invested and dare to deploy on a large scale?”

In his view, the situation of foreign operators is even worse than that of China, and the concern for investment return is even greater. Taking Europe as an example, because of the small population in Europe and the balance of income and expenditure on 4G, how to find more money to build 5G is a problem. “China benefits from having a large population, which is rigid demand. The denser the population is, the larger the market is, the better the operator will develop. So China, Japan and South Korea are three countries that are more motivated to engage in 5G.

Under such circumstances, telecom operators can only increase revenue and reduce expenditure. The way to throttle is to reduce the cost as much as possible. It is difficult to add the site at present. 5G and 4G can share the resource of the tower. The technicians need to increase the transmitting power of the transmitter and increase the number of antennas to expand the coverage.

Apart from mining market demand, operators also need to find new business models. Insiders have reached a consensus that in the short term, demand for vertical industries such as the Internet of things has not yet fully emerged. The co media industry alliance of the Ministry of industry and information media industry alliance digital culture working group group leader Bao ran “chicken egg, egg chicken” to compare the common development of 5G and vertical industry. Both equipment vendors and operators are exploring wireless technology applications in smart cars, wearable devices and UAVs.

As early as 2016, China Mobile set up the 5G joint innovation center. Its goal is to build a win-win cooperation ecosystem with joint communications and vertical industries.

Last year, HUAWEI Wireless X Labs wireless application scenario laboratory released 5G ten application scenarios white paper. The white paper evaluates and analyzes the dependence degree of 5G technology, commercial value and business maturity of the industry, and identifies ten major scenes that are strong related to 5G technology and the most commercial potential. They are: cloud VR / AR, car networking, intelligent manufacturing, intelligent energy, wireless medical, wireless family entertainment, networked UAV, society Network, personal AI assistant, intelligent city. Some of the application scenarios have been tested in the field.

“The proportion of vertical industry applications, the development of 5G will succeed. Otherwise, no money will be earned, no one will be willing to build a network. Liu Guangyi said.

Although operators are confused about the demand for 5G in the future, the development of 5G has not slowed down. As Xu Zhijun said, HUAWEI will continue to invest in 5G technology. If it does not, it will pay the price. “If you are not good at 5G, customers will not buy 4G products.” The same is true for operators, he said, and if one operator launched the 5G network, other companies had to keep up, even if they were in brand operation or marketing.

Liu Guangyi also admitted that operators are being pushed forward by competition.

“We need to explore the vertical industry, but do not expect too much from the vertical industry.” Xu Zhijun mentioned another practical problem at HUAWEI global analysis university. 5G has not yet arrived from the vision to the real landing.

“Any industry boss has a sense of fear for the future, and I think he (Xu Zhijun) is right about his future, but he’s going to find a way to deal with it.” Zhang Ping told China News Weekly.

Queenie Chu, chief marketing officer of HUAWEI 5G product line, admitted that exploring the vertical industry is a great prospect for HUAWEI, but it is also very difficult to succeed. She said to China News Weekly, “in the past, we could do hundreds of millions or even billions of users by setting up 3 operators. But the vertical industry has one characteristic, that is, fragmentation. A hospital is a client. How many hospitals are there in the country? The plans between hospitals are different. To the vertical industry, our customers are not just 3 operators, but tens of thousands of them. Their demand is very different. Fragmentation of demand by millions of different enterprises is a very complicated process.

In the past, when public opinion exaggerated the changes brought by 5G, Queenie Chu thought the sound could help to build more confidence in 5G and keep the heat and attention of the topic. But at this stage, the NSA Standard Version of 3GPP has been frozen last year, and its content is only focused on human services to solve consumer oriented mobile broadband demand.

Beijing University of Posts and Telecommunications’s network system construction and integration of the Beijing Key Laboratory of the key laboratory Lu Zhaoming said, “the first definition of this thing (5G application scene), are all theoretical, really can not be achieved, we do not know. It may be useful for 5G to be commercially available in a few years, but at least so far, most of the scenarios still have no actual requirements. He told China News Weekly, “the expectation of 5G is too high. If everything is added to 5G, it is not good for the industry. For this, the people in the industry are quite clear.”

In the early days of 5G, Mr. Liu Guangyi said 5G described it perfectly and seemed to be omnipotent, but when it came to business, we had to look at the problem rationally. The requirements for the key capabilities of the 5G are always conditional, not all the conditions can be reached at any time, it should be a scene, and not all the indicators need to be met in the same scene.

In his view, the large-scale commercial use of 5G in 2020 means that the base station of the operator is built to a certain scale, the number of users is issued to a certain number, and a certain number of typical services run on the intelligent terminal, and it is different from the current 4G business. He currently believes that the most realistic scenes are: 4K, 8K ultra high definition video, some naked eye 3D, and VR (virtual reality) technology used for simple games and education training.

The work of Liu Guangyi and his team needs to run around the world, sometimes to communicate with the manufacturers, sometimes to the summit, to let more participants in the 5G industry chain hear their voices and approve their description of the future of the 5G. As operators, the global competition of 5G makes it impossible for them to stop, and can only make efforts to drive more enterprises to move towards the next generation wireless network.

5G is still in the process of deployment, and Zhang Ping has been invited to attend the “6G Symposium” organized by the Ministry of industry and commerce. He said at the meeting, “5G hasn’t started yet. We must think about our tempo. What are we going to do? We must first make a solid foundation rather than create a concept. If we fail to lay a solid foundation, we will be more honest. We have a good grasp of the rhythm. “

On duty editor: Han Zhongqiang


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