EN5G is an extension of 4G, but unlike 4G, 5G is not a single wireless access technology, but a true sense of the fusion network, compared with 3G / 4G technology, 5G technology transmission rate is high, network capacity, short delay, can improve the network energy efficiency of more than 100 times, truly open the Internet era of everything. China's IMT-2020 (5G) promotion group defines the main technical scenarios of 5G: continuous wide area coverage, hot spot high capacity, low power large connection, low time delay and high reliability. It is basically the same as the three scenarios defined by the International Telecommunication Union ITU, but China further divides mobile broadband into two scenarios: wide-area large coverage and hot high-speed.
5G industry market development prospects: Potential trillion market scale
2018 is a milestone year for the communications industry, and the overall industry is at a nodal moment of "three-phase superposition". On the one hand, the industry is on the eve of the transition from 4G to 5G, and the business model will shift from meeting people's communication needs to enabling vertical industries and enterprises. On the other hand, 2018 is also the starting point of the communications industry's 10-year intergenerational cycle and operator capital expenditure cycle resonance, operator capital expenditure will bottom out in 2018. The communication industry, like other industries, also follows the law of upstream and then downstream, infrastructure and then product services. From the perspective of tube-end-cloud architecture, the cascade development law of basic network first, terminal follow, and application and service again is also applicable to 5G. In this process, the investment subjects of the entire 5G industry chain have also changed accordingly, transferring from operators and consumers to vertical industries and enterprise players. We believe that based on the 5G theme, there are three big waves of investment opportunities in the communications industry in the future.
Three waves of investment under the 5G theme
5G industry market development prospects: Potential trillion market scale
2018 will be the first year of 5G. From the perspective of national 5G promotion plans, 5G is expected to achieve network commercialization in 2020. With South Korea planning to take the lead in demonstrating 5G technology at the Pyeongchang Winter Olympics in February 2018, 2018 will be the first year that 5G moves from standardization to pre-commercialization.
Global 5G advancement
5G industry market development prospects: Potential trillion market scale
China's 5G industry will usher in large-scale demand growth. It is expected that by 2020, the scale of base stations in China alone will reach 100 billion market, and the overall 5G industry market prospects are very broad. It is estimated that by 2030, 5G will drive 6.3 trillion yuan of direct total output and 10.6 trillion yuan of indirect total output. And with the further advancement of the commercialization process, the output structure of China's 5G industry will also be transformed to a certain extent, among which the output of 5G information service providers will increase significantly with the popularization of basic 5G facilities in the future.
5G is getting closer and closer, opening the door to the trillion-level market.
According to the "China 5G Industry Development Prospect Forecast and industry Chain Investment Opportunity Analysis Report" released by the Prospective Industry Research Institute, according to the official commercial use of 5G in 2020, it is expected to drive about 484 billion yuan of direct output and 1.2 trillion yuan of indirect output that year. By 2030, the direct output and indirect output driven by 5G will reach 6.3 trillion yuan and 10.6 trillion yuan, respectively, with an annual compound growth rate of 29% and 24%, respectively. From the perspective of output structure, in the early commercial phase of 5G, the income of equipment manufacturers brought by network equipment investment will become the main source of 5G direct economic output, and it is expected that in 2020, the total income of network equipment and terminal equipment will be about 450 billion yuan, accounting for 94% of the total direct economic output.
5G future economic output (trillion yuan)
5G industry market development prospects: Potential trillion market scale
According to the Prospective Industry Research Institute, the total investment in the network from 2020 to 2030 is expected to reach 411 billion US dollars, about 2.8 trillion yuan, which is 3.5 times that of 4G networks. Wei Leping pointed out that according to the acceptable cost of operators, the total investment in the network from 2019 to 2025 is expected to be $180 billion, about 1.22 trillion yuan, which is 1.5 times the investment in 4G network (about $117 billion).
Investment opportunities brought about by changes in 5G technology
5G industry market development prospects: Potential trillion market scale
According to this calculation, the total investment in China's 5G network construction will exceed 1.2 trillion yuan, which is roughly in line with the industry's expected 1.22 trillion yuan. In addition, the gradual maturity and promotion of 5G technology will have a profound impact on the component structure of the downstream intelligent terminal RF front-end module (RFFEM), while the RF front-end of smart phones is a personal consumer product with different driving attributes, and the terminal market is separately counted.
The advancement of 5G will greatly accelerate the penetration process of vehicle-mounted networking terminals.
It is expected that in 2022, the global market ownership of connected cars will reach 350 million units, accounting for 24% of the market, and the sales of new cars with connected functions will reach 98 million units, accounting for 94% of the market. In China, according to the statistics of the Academy of Information and Communications Technology, as of August 2017, the number of users of China Unicom's vehicle networking exceeded 20 million, the number of users of China Telecom's vehicle networking was 11.06 million, and the number of users of China Mobile's vehicle networking was 27 million.
In addition, a total of 683 vehicle-mounted networking terminals in China have obtained the access card of the Ministry of Industry and Information Technology, of which 2G and 3G vehicle-mounted networking terminals are the main ones, and 4G vehicle-mounted networking terminals have grown rapidly since 2016, rapidly increasing from zero to 101 in more than a year. It is foreseeable that vehicle networking terminals based on 4G and 5G will continue to maintain rapid development momentum in the next 3 to 4 years. At the same time, V2V communication equipment is also expected to take advantage of the popularity of V2X technology to significantly increase the installed capacity. Global sales of V2V communication systems will reach 700,000 units in 2017, grow to 5.6 million units by 2020, and exceed 55 million units by 2025.
In terms of policy, China has taken 5G as a national strategy, in March 2017, 5G was officially written into the government work report, and China should follow 3G, 4G parallel to achieve comprehensive leadership in the 5G era; The 13th Five-Year Plan points out that it is necessary to actively promote the development of 5G and start 5G commercial use in 2020. The government supports the development of 5G, enterprises accelerate research and development, and global 5G commercial use has achieved a white-hot competitive trend, and 5G commercial use is very likely to be fully landed in mid-2019.
According to the latest news, Tianjin's first 5G base station was opened in Tianjin Open Laboratory, China Mobile's 5G Joint innovation center.
Tianjin, as the first batch of 5G application demonstration cities in the country, the opening of the first 5G base station marks the construction of 5G technology in Tianjin's test environment and scale networking construction has entered a critical period.
According to reports, 5G base stations based on multi-antenna Massive MIMO, newly coded LDPC/Polar and other 5G advanced new technologies have super bandwidth capabilities, experience rates of up to 1Gbit/s, 100 times that of 4G, and peak rates of up to 20Gbit/s, 20 times that of 4G. This means that in the 5G network environment, high-speed applications such as ultra-high-definition video broadcast, VR (virtual reality)/AR (augmented reality) and naked-eye 3D will be realized.
In addition, the two characteristics of 5G with high reliability, low delay and low power connection will strongly promote telemedicine, industrial control, remote driving, smart city, smart home and other applications into people's lives.
In the future, it will rely on the Tianjin Open Laboratory of China Mobile 5G Joint Innovation Center to actively do a good job in the two-wheel drive of 5G technology and business, strengthen the open cooperation between the upstream and downstream of the industrial chain, and strive to build a cross-industry integration innovation ecology to drive local economic and social development.
