China has nearly 430 million 5G connections, accelerating exploration of the vertical application market

By the end of 2021, nearly 8% of the global consumer group, about 640 million users will use 5G, and the continuous network construction of operators has played a pivotal role.

Currently, the global 5G industry is still in a period of large-scale infrastructure investment. The latest GSMA data shows that as of the end of the third quarter of 2021, the global 5G network has developed to 176, and the number of 5G connections has reached approximately 550 million. Among them, China's 5G connections account for 78% of the world's total 5G connections, or about 430 million. 5G connections and users are still growing. Recently, GSMA Greater China President Si Han told reporters that by the end of 2021, nearly 8% of the global consumer group, about 640 million users will use 5G, and operators continue to build networks. , Played a pivotal role. And 5G communication is the basic support for the birth of new applications. Sihan pointed out that the innovation of 5G and services has also added a lot of possibilities for the development of B2C. The development strategy of B2C in the 5G era will be reshaped, including cloud games, XR, Ultra-definition video, e-sports, etc., and the ARPU (average revenue per user) value of 5G is currently 10% higher than that of 4G on average, which also brings new business opportunities to the new B2C business.

Exploring new models in the industry chain

In the 5G industry chain, companies are exploring new applications of 5G on the consumer side and the B side. Among them, operators play an important role. The GSMA think tank’s report on global operator revenues "Operators in the Digital Era: China Leads Revenue Growth" pointed out that in the new context of rapid global 5G deployment, the revenue structure of global operators has changed. In addition to traditional telecom revenue, new The revenue from services has increased significantly, and China’s performance in revenue growth is particularly impressive. According to Sihan's analysis, the revenue structure of operators is becoming increasingly diversified, and new services beyond the traditional telecommunications business are more important than ever. Looking at the industry as a whole, in 2017, traditional telecommunications services, including fixed-line, fixed-line, mobile messaging, voice, data, etc., accounted for up to 82% of operators’ revenues, while pay TV and a series of B2C and B2B services, Including new services such as OTT video, media and advertising, games, Internet of Things, cloud, security, business and financial services, smart home services, and vertical industry solutions, which will increase from 18% in 2017 to 24% in 2020. Traditional telecommunications services will drop to 76% in 2020. From the operator’s financial report, China’s three major operators, China Mobile, China Unicom, and China Telecom, have doubled their revenue from traditional services in 2020 to 230 billion yuan, including B2B services. The growth of the cloud is the main driving force. Cloud revenue has increased by 7 times from 2017 to 2020, and the revenue of logistics network and data has each doubled. 5G is an important catalyst and driving force. In a horizontal comparison, “Among the 16 major global operators we surveyed, such as the United States, Japan, and South Korea, the overall performance of non-traditional business revenue should be from 15% to 40%, while China’s revenue is still below 20%. SoftBank has a relatively good performance at 40% to 41%, and Chinese operators still have a lot of room and potential to move forward." Sihan said. At the same time, the cooperation between operators and chip manufacturers has become closer. Taking telecommunications and Intel as examples, Zhuang Binghan, vice president of Intel’s sales and marketing department and general manager of carrier customer sales in the Asia-Pacific region, said in an interview: “Intel and China Telecom have a long-term cooperation. In 2010, we promoted the virtualization and cloudification of telecom networks, which has a very natural evolution. Now we are also beginning to increase cooperation with China Telecom Tianyi Cloud on the public cloud. We believe this is also an important step in the transformation of operators. "For Intel, which is CPU-based, it has also increased its investment in AI, GPU, and FPGA in recent years to increase its computing power.

Challenges of B-side business

According to GSMA's estimates, by the end of 2021, 5G penetration rates in South Korea and China will exceed 30%, accounting for 32% and 30% of the total mobile connections, respectively. It is estimated that by 2025, the total number of 5G connections in China will reach 865 million, accounting for 40% of the total number of global 5G connections, and China's 5G penetration rate will exceed 50% (not including IoT connection data). It can be seen that China is at the forefront of 5G development in the world, and there are currently more than 10,000 cases of 5G application innovation across the country. In cities, China also has many cases. Liu Hong, General Manager of Technology of GSMA Greater China, introduced to reporters that 5G has five main applications in urban governance. For example, 5G in transportation has been applied to public transportation, traffic diversion and management, and supervision of cargo transportation; emergency management and In the field of public safety, 5G can be applied to smart police; in the ecological environment, it can be used in ecological monitoring, garbage removal, pollution prevention, etc.; in the livelihood services, there are smart communities, museum digitization, etc.; in digital government, it can be used For the collection of urban brain data, e-government and open government affairs, etc. "If 5G can be widely used in these applications of urban governance, it will help the scale development of 5G industry applications, because the similarity between different cities is guaranteed to a certain extent, and it can enrich 5G applications. , Can reduce the price of 5G modules and 5G terminals, and help 5G move towards scale." Liu Hong said. At the same time, he also pointed out that in some B-end vertical scenarios, the combination of 5G and industry poses challenges. Take the Industrial Internet as an example. "At present, if we want to achieve the organic combination of 5G and the chemical reaction of the Industrial Internet, there are still some tasks that need to be done, including the need to do just-needed screening. Not all scenarios are suitable for 5G. In order to screen these cases in a big wave, the second very important issue is the need to jointly formulate corresponding standards. The third issue is the current application of 5G in the industry, and the corresponding modules and terminals are still relatively few. It is also a key factor restricting the large-scale development of 5G industry applications." Entering 2021, the application of 5G to B has attracted more and more attention. On the whole, how to transform vertical applications from model houses to commercial houses and expand on a large scale is the focus of the industry. Huawei’s rotating chairman Hu Houkun previously stated that industry standards are the key to the scale of 5G to B replication. In China, operators have established projects for 5G application standards in coal mines, steel, electric power and other industries in conjunction with industries and partners. "In the past, the industry underestimated the difficulty of 5G to B because it was not only a technical issue, but also the business model and ecological construction. The development of 5G to this day, the industry has also underestimated the achievements it has achieved, because it is built through a lot of practice. The soft ability of the company is becoming the long-term competitive advantage of the pioneers." He said.