China Drives Surge in 5G Deployment in 2021

Other markets will follow as China ramps up 700 MHz network roll-outs

China is a huge market for the mobile industry and network deployments were always going to be big when 5G arrived. In total, China Mobile, China Unicom and China Telecom deployed more than 600,000 5G base stations in 2020, covering all cities above prefecture level as the operators sped up their 5G coverage during the pandemic. Fast-forward into early 2021 and the pace of roll-out slowed a little, but this was just the calm before the storm — the storm in this instance being a deployment phase based on 700 MHz spectrum.

China Mobile is the major protagonist driving this effort, working in partnership with China’s newest mobile operator, China Broadcasting Network (CBN). Earlier in 2021, as part of an initiative to cut the costs of rolling out network infrastructure, China Mobile finalized a network investment collaboration deal with CBN — which was awarded China’s fourth 5G licence in late 2020 — to jointly fund the construction of a 5G network supporting services in the 700 MHz spectrum band.

Both operators will have access to the infrastructure, which China Mobile will manage and CBN will pay its partner a fee in return. As part of the deal, CBN will also be able to use China Mobile’s 2.6 GHz network for another fee. The operators agreed that the 700 MHz and 2.6 GHz networks will adopt the same shared technical solutions, as both parties will be accessing the two networks.

The procurement process for their base stations revealed something of the enormity of the 700 MHz investment plan in China — the tender is for 480,397 base stations. China Mobile has also issued a tender for 1.74 million multiband antennas that support 700 MHz as one of the bands. It has set an ambitious time frame, planning to have 400,000 sites installed in 2021, with commercial services up and running within two years. The sheer scale of this tender is a daunting task, but the major supplier of network equipment is Huawei, which has in the past proven that it has the capacity to cope with the production, inventory and logistics requirements of this size and speed of deployment.

This means that the total number of 5G base stations deployed in China is expected to reach 1.7 million by the end of 2021, an even faster pace of network upgrading than seen in 2020 and greatly expanding 5G coverage into counties and towns. To meet such rapid expansion of mobile infrastructure, local authorities are receiving guidance about how to support 5G network construction projects so that they meet their tight deadlines — an indication of the Chinese national government’s commitment to its programme of digital transformation and the role 5G networks play in this project.

The 700 MHz spectrum band has been called “golden spectrum” because it has better propagation characteristics than other 5G frequencies, balancing the range of coverage with strong capacity performance, so it can be used for a variety of 5G applications. This makes it a solid investment for China Mobile and CBN, allowing them to push 5G into remote communities, improve indoor user experience and open up lower-bandwidth 5G uses that depend on extensive coverage.

This wide application of 700 MHz spectrum will also help support efforts to deliver more innovative services such as in the Internet of things (IoT). Already Industry 4.0 is racing ahead in China — by the end of 2020, there were more than 1,100 industrial IoT projects running on 5G networks including autonomous driving, smart grids and online education, with many industry sectors using 5G services to accelerate industrial digitization. Adoption of other capabilities, such as edge computing, artificial intelligence and machine learning, will also be boosted by 5G, as operators address new enterprise segments with network slicing and 5G private mobile network solutions.

This rapid high-volume deployment of 5G base stations for 700 MHz spectrum in China is also significant for global mobile markets, both for equipment and devices, as it will lead to customized and economical 5G chips, modules and terminals. Not only does it prove that providers such as Huawei have the capability to cope with this level of demand, but it also will help mature the range of infrastructure solutions supporting 700 MHz spectrum.

With maturity of products comes operator confidence in other markets, so we expect to see rising numbers of deployments based on 700 MHz 5G spectrum elsewhere too, even if they don’t match the scale seen in China.