How much does it cost to build a 5G network operator

How much does it cost to build a 5G network operator

In 2020, the country’s top leadership has clarified the new infrastructure strategy, and informatization is fortunate to become the focus of work. The three major operators represented by China Unicom closely followed regulatory guidelines and stepped up the construction of 5G networks.

So how much did the operators spend on 5G network construction in 2020? What is the trend of investment plans for the construction of 5G networks in the future?

1. China Unicom’s 5G capital expenditure in 2020 is 5 billion US Dollars

In the annual financial report released in early March, China Unicom stated that its 5G expenditures in 2020 will be approximately 5 billion US Dollars.

China Unicom said that by building and sharing a 5G network with China Telecom, the total 5G base station scale has reached 380,000, and the coverage scale achieved for the first time in history is basically the same as that of the dominant operator.

With regard to the issue of how much money has been saved for China Unicom and China Telecom by joint construction and sharing,

which everyone is particularly concerned about, now we finally have clear data. China Unicom said that joint construction and sharing has saved more than 11 billion U.S Dollars in network construction costs for both companies,

greatly reducing network operating costs, and greatly shortening the network construction cycle.

China Unicom expects capital expenditure of 5 billion in 2021, of which 5G expenditure is about 5 billion,$ plans to add 320,000 5G base stations, and finally achieve the goal of 700,000 available 5G base stations by the end of 2021. We remind everyone here that China Unicom’s construction target in 2021 is lower than the number of construction openings in 2020.

Regarding the investment plan for the future 5G network construction, China Unicom executives stated that the peak of 5G capital expenditure is mainly concentrated in 2020 to 2022. In the past three years, China Unicom’s annual expenditure plan is about 10 billion $, of which 5G investment accounts for about 5 billion , After 3 years, 5G investment will begin to enter a decline phase.

2. China Telecom’s 5G capital expenditure in 2020 is nearly 6 billion $,

China Telecom’s 2020 financial report data shows that the capital expenditure for the whole year of 2020 will be 12 billion $, of which 6 billion will be used for 5G network construction. Through co-construction and sharing with China Unicom, China Telecom’s total 5G base stations have reached 380,000 by the end of 2020.

China Telecom announced a capital expenditure plan of 12 billion USD in 2021, of which 45.6% will be used for 5G. A rough estimate is about 39.7 billion yuan. It plans to build 320,000 5G base stations (co-building and sharing), of which about 180,000 will be built by China Telecom. 5G base stations, which means that China Unicom will build 140,000 units for about 35 billion yuan.

The total capital expenditure of China Telecom and China Unicom on 5G network construction in 2020 is 11 billion USD. According to their 2021 5G capital expenditure plans, China Telecom and China Unicom will spend a total of 74.7 billion yuan, but only 320,000 will be used for new 5G base stations. Remind everyone to pay attention to the fact that the planned investment of the two companies is large, but the number of sites to be built is small.

According to China Unicom’s senior executives’ judgment on the 5G network construction cycle, China Telecom’s investment in 5G network construction in the next three years (including 2021) will be about 119 billion yuan. The volume is about 1.2 million seats.

3. China Mobile’s 5G capital expenditure in 2020 is about 15 billion U.S Dollars

As of March 24, China Mobile has not yet announced its 2020 annual operating report. We are still uncertain about the specific amount of China Mobile’s capital expenditure on 5G network construction in 2020. However, according to China Mobile’s value concept of “the network is the lifeline of communications enterprises”, its investment scale is likely to be higher than the sum of its friends.

It is necessary to remind everyone to pay attention to a very interesting phenomenon. China Mobile invested about 100 billion yuan and built 390,000 5G base stations; China Unicom and China Telecom jointly built and shared 73.2 billion yuan in telephone charges, and built 380,000 5G base stations. What expenses did China Unicom and China Telecom save by building and sharing?

At present, we have not checked China Mobile’s capital expenditure plan for 5G network construction in 2021 from public channels. However, according to the target of 600,000 new 5G base stations announced by the Ministry of Industry and Information Technology in 2021, China Mobile will build at least 280,000 5G base stations, which is likely to exceed the total number of joint ventures.

If calculated according to the scale of capital expenditure in 2020, in the next three years, China Mobile’s total capital expenditure on 5G network construction will reach 300 billion yuan, and the total amount of 5G base stations built will be approximately 1.2 million. In addition, considering the 5G network construction agreement between China Mobile and China Radio and Television, the scale of completion may be larger.

4. Is 2.4 million 5G base stations enough?

According to the future 5G network construction plan announced by China Unicom and China Telecom, and the estimated China Mobile 5G network construction plan, by the end of 2023, the total number of 5G base stations in my country will reach 2.4 million. Although this scale will undoubtedly become the world’s first, but is it enough?

Information obtained from public channels shows that the total number of base stations in my country has reached 9.31 million, of which the total number of 4G base stations has reached 5.75 million. It has been 7 years since 4G was officially licensed for commercial use in early December 2013. Considering that 5G has a history of three and a half years from its commercial license in early June 2019 to the end of 2023, 2.4 million base stations are not too much.

Although the main application of 5G is in the government and enterprise markets, although operators have established a network construction strategy for the long-term coexistence of 4G+5G, from the perspective of the majority of users, a higher-performance 5G network naturally requires more 5G base stations to support it. Otherwise, how can the characteristics of big video + large traffic + low latency be brought into play?

At present, the debate on whether there is advanced construction of 5G networks on the Internet is particularly fierce. Some people analyze from the perspective of science and technology, others conduct research from the perspective of return on investment, and even others argue from the perspective of whether the company itself can sustainably develop. As long as everyone’s positions are different, there will naturally be great differences in viewpoints.

If only from the perspective that 5G can empower thousands of industries, even if 5G networks have a trend of advanced construction, they should be supported!

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How much does it cost to build a 5G network operator
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