5G will directly drive the total economic output of 1.3 trillion yuan

The current impact is highlighted in the development of the digital industry, but the supporting role of 5G for the transformation and upgrading of the real economy and the ability to create a better life for the people with the innovation and spread of applications has also begun to emerge. With the commercial development of 5G, the impact of 5G on the economy and society has gradually emerged. At present, this impact is highlighted in the drive for the development of digital industries, but the supporting role of 5G for the transformation and upgrading of the real economy and the ability to create a better life for the people has also begun to emerge with the innovation and diffusion of applications. The year 2021 is the second year that the China Academy of Information and Communications Technology (CAIC) has released the White Paper on 5G Development and Economic and Social Impacts in China (hereinafter referred to as "White Paper"). The White Paper calculates the economic and social impact of 5G in 2021. It is estimated that 5G will directly drive total economic output of RMB 1.3 trillion, directly drive economic value added of about RMB 300 billion, indirectly drive total output of about RMB 3.38 trillion, and indirectly drive economic value added of about RMB 1.23 trillion in 2021, representing an increase of 33%, 39%, 31% and 31% respectively over 2020. At present, the full release of 5G's impact on the economy and society depends on the vigorous development of 5G applications, which will largely depend on whether the industrial ecosystem supporting application innovation can gradually mature and complete. To achieve this, under the guidance of the government, telecom operators, equipment providers, content providers, solution providers, industry customers and other industry forces are gradually converging to communicate user needs and explore unified and coordinated 5G products and service models with excellent performance and low cost. The next 1-2 years will be a critical period for the gradual improvement of the 5G application industry ecology, which still requires the concerted efforts of industry colleagues to overcome the difficulties. The White Paper aims to present the trend of 5G commercial development to all sectors of the society and the industry as the core content, objectively sort out the progress, achievements, economic and social impacts and problems of 5G commercial development in 2021, and make a judgment on the development direction in the next 1-2 years. The Second Anniversary of 5G Commercialization Leads to Rapid Development of Digital Economy China's 5G commercialization will reach its second anniversary in 2021. With the concerted promotion of policies and the acceleration of digitalization, the commercial development of 5G has continued to progress, with good results in network construction, technical standards, industrial development, application cultivation and market performance, laying a solid foundation for the subsequent development of 5G. As a key base of digital infrastructure and a technology industry with extensive correlations, 5G development is expected to drive the rapid growth of the digital economy and accelerate the pace of digital transformation of the economy and society. 5G will drive the growth of the digital industry from both the investment and consumption sides. From the investment side, 5G will stimulate more investment in digitalization in various fields. On the one hand, telecom operators continue to increase their investment in 5G networks and related supporting facilities, which in turn will drive the growth of the industry chain related to the manufacturing of communication equipment. According to public financial reports, the three major basic telecom operators plan to spend a total of RMB 184.7 billion on 5G capital expenditure in 2021, an increase of 5.1% compared to 2020. On the other hand, with the further development of 5G industry applications, other sectors of the national economy are beginning to increase their investments in 5G and related ICT technologies. China Mobile's financial report for the first half of 2021 showed that 5G dedicated network services drove China Mobile's incremental DICT revenue to over $6 billion, accounting for 48% of incremental DICT revenue and 17% of incremental communications service revenue in the same period; China Unicom's 5G industry applications accumulated contracts of over $1.3 billion in the first half of the year; and China Telecom's 5G application scenario nearly doubled from the end of 2020, showing an explosive growth in market demand. The market demand shows explosive growth. From the side of consumption, 5G development promotes the expansion and upgrade of information consumption. The expansion of 5G network coverage has pushed consumers into the 5G replacement era, bringing the smartphone industry back to a growth trend. China's 5G cell phone shipments are expected to reach 250 million units in 2021, an increase of 53% over last year. Secondly, 5G development is driving mobile users' data business consumption. 5G's faster network speed and many innovative digital services based on 5G, such as ultra-high definition video, AR/VR, cloud games, etc., have increased the ARPU of 5G users compared to that of 4G users. According to the financial report in the first half of 2021, China Mobile's 5G ARPU was 88.9 yuan, far exceeding its average ARPU of 52.2 yuan for mobile users, and the increase in 5G user penetration drove its mobile APRU to reverse the declining trend since 2018; China Telecom's 5G ARPU rose to 57.4 yuan, and the ARPU of 4G users rose by 10% for 5G packages; China Unicom's 5G packages are growing rapidly. China Unicom's 5G packages grew rapidly, with 5G user penetration reaching 37% and ARPU for mobile users at RMB44.4, up 8.5% year-on-year. Completing the shortcomings of 5G industry development and constructing a 5G innovation ecosystem The White Paper points out that the next 1-2 years are still a critical period for the commercial development of 5G in China. During this period, the prominent task of 5G commercial development is to gradually make up for the shortcomings in network, technology, terminals, and standards for 5G application innovation according to the actual needs of market development and under the guidance of government policies, integrate the strengths of all parties in the industry, and build a more complete 5G innovation ecosystem, so as to lay a solid foundation for the outbreak and prosperity of 5G application innovation. First, network coverage will be extended to rural areas, and industry capabilities will be strengthened. At present, China's 5G network is still in the early stage of construction and has not yet reached the level to effectively support the demand for consumer and industry-level application innovation. In the next 1-2 years, it is expected that the 5G network will continue to promote wide area coverage and use multi-band synergy to strengthen coverage and enhance industry-oriented 5G network supply capacity. The 3GPP plans to finalize the R18 version in December 2021, and after the current research and discussion, it will evolve and enhance from continuous broadband capacity enhancement, vertical industry-oriented refinement design and new business exploration. Third, supporting products to explore new paths, industrial ecology gradually improved. At the same time, with the deepening of 5G applications, more and more industrial forces are gathering to explore the development of supporting products for 5G applications, and new trends will emerge in the development of virtual reality terminals, industry modules and terminals, and industry platforms and solutions. Fourth, consumer applications are being upgraded in stages, and industry applications are leading the way by demonstration. At present, 5G applications are in a critical period of penetration from "blossoming" to all industries, processes and links. The launch of the "Sailing" action plan has pointed out the direction for consumer and industry applications, and will continue to promote 5G applications to achieve the leap from 1 to N. Together, we will build a new pattern of 5G to fully empower economic and social development.