Introduction: On June 6, 2019, a news photo was posted on most websites in China, marking China's entry into the 5G era. 2019 is also known as the first year of 5G commercialization in the industry. Now, let's review the progress of 5G in the last year and predict its future.
Cellular networks are a part of the global infrastructure, and standards are the foundation of these networks. Without unified standards, these networks cannot communicate with each other. The 3rd Generation Partnership Project (3GPP) has played a vital role in the development of the standards. As an organization that unites more than 680 companies worldwide, 3GPP members must attend various meetings frequently. The COVID-19 pandemic forced 3GPP to cancel all of its offline meetings, but this did not hinder the effective collaboration of the standard development experts. The progress of the overall standard development process is shown in the following figure.
Rel-16 was frozen on July 3, 2020. This release meets all IMT-2020 requirements issued by ITU in 2015.
More 5G system enhancements and new features shown in the following figure are set to follow in Rel-17, the next release of 3GPP. Rel-17 is scheduled for delivery in 2021. From the perspective of Alibaba, the features of Rel-16 are already frozen. We must focus on Rel-17 to start our technical and business deployment.
On June 6, 2019, the China Broadcasting Network (CBN) became the fourth telecom operator in China that received the commercial 5G license. Many people were curious about the 5G deployment strategy of CBN and its potential partners until China Mobile submitted a statement to the Hong Kong Exchanges and Clearing on May 20, 2020:
The parties shall jointly determine network construction plans, jointly invest in the construction of the 700 MHz 5G wireless networks at a ratio of 1:1, and jointly own and have the right to use the 700 MHz 5G wireless network assets. China Mobile shall provide transport bearer network services for CBN between 700 MHz 5G cell towers and CBN's connection points in local cities or provincial centers on a paid basis, and also open up and share its 2.6 GHz 5G networks with CBN on a paid basis. China Mobile shall also undertake the operation and maintenance work for the 700 MHz wireless networks, while CBN shall pay China Mobile the network operation and maintenance fees. CBN will use China Mobile's 2G/4G/5G networks on a paid basis to serve its customers, and China Mobile shall provide international business transfer services for CBN on a paid basis. In 5G cooperation, the parties shall remain independent in terms of both brand and operation.
To sum up, CBN has become an operator that provides the most comprehensive 5G frequency bands in China, including 700 MHz, 2.6 GHz (shared by China Mobile), 3.3 GHz (shared by China Telecom and China Unicom), and 4.9 GHz (in trial). It bought half of the required network infrastructure, the network operation, maintenance, and transmission services and is ready to serve 5G subscribers with its brand.
5G cell towers are fundamental to the development of 5G networks. The COVID-19 pandemic slowed down the speed of the 5G cell tower construction at the beginning of 2020, but more than 250,000 cell towers were finished by July 1. In April, the construction speed recovered to 10,000 cell towers/week, and this speed is increasing steadily. China is expected to achieve the overall objective of covering all prefecture-level (and higher-level) cities with more than 600,000 5G cell towers. 59.58 million 5G phones were sold in the first half of 2020, and this number was expected to reach 180 million by the end of 2020. Note: Not all subscribers using 5G data plans are 5G subscribers. 4G subscribers can also subscribe to 5G data plans to have more data per month. By the end of June 30, there were more than 70 million 5G data plan subscribers, and this number is much greater than the amount of 5G phone users.
By June 30, 108 5G phone models were available in the global market, with more than 60% coming from Chinese brands. According to the statistics from the China Academy of Information and Communications Technology (CAICT), in April 2020, 39.3% of phones sold in China were 5G phones. 22 new 5G phone models were released, accounting for 45.8% of all new phone models released in the same period. Soon, 4G and 5G phones will have equal shares in terms of the total number of phones sold and the number of new phone models. In terms of price, the Redmi K30 5G has had a price reduction to CNY 1,300 (USD 187), making it the most affordable 5G phone.
Not all 5G phones provide a satisfactory 5G experience. Different phones may have different performances in calls, data transmission, and power consumption due to their differences in designs and chips. Two phone models with the same chips may have different performances. According to the latest assessment results of the China Mobile Smart Hardware Testing Center, HUAWEI Kirin 990 provides leading performance in terms of data transmission, HUAWEI Kirin 990 and MTK Dimensity 1000L have good performance in terms of power consumption, and all chips, except Samsung, provide good call quality.
In 2019, the cheapest 5G data plans of China Telecom, China Unicom, and China Mobile cost CNY 128 (USD 18), and many customers found them expensive. The operators then offered discounts to reduce the subscribers' monthly 5G costs to about CNY 88 (USD 13).
5G was mentioned repeatedly on the annual plenary sessions of CPC and CPPCC in 2020. It was pointed out explicitly in the 2020 Plan for National Economic and Social Development that we must accelerate 5G network construction and promote the application of 5G technology. 5G will play a leading role in China's new infrastructure construction and has become an essential infrastructure that supports the digital, network-driven, and intelligent transformation of the Chinese economy and society. 5G also has huge potential in stabilizing investment, promoting consumption, facilitating industrial upgrades, and fostering new economic growth drivers. To motivate 5G development, many national and local policies have been announced. Understanding these policies can help us align our technologies and business directions with national strategies. I think the following three policies are very important to our business.
The promotion plan specifies the KPIs for promoting the "5G+ Industrial Internet" in 2022.
The numbers 5, 10, and 20 will become benchmark metrics of various industrial networks that we will focus on in the future.
In this policy, the Ministry of Industry and Information Technology (MIIT) requires the operators to limit the scale of non-standalone (NSA) 5G networks, and mainly build standalone (SA) networks. According to the policy, the 5G millimeter-wave frequency use plan must be issued at an appropriate time, the research and development of the 5G industry-based (including industrial Internet) frequency bands must be carried out, and the licensing for technical testing frequencies must be implemented. Network frequency bands are resources controlled by the government. This is the first time the government asked companies to do research and development on frequency bands. In terms of application scenarios, the policy mentioned the 512 Project we described earlier, 5G+ healthcare, 5G+ Internet of Vehicles (IoV), and the construction of the application ecosystem. Specifically, it set forth the important communication standards and protocols that help incorporate 5G and LTE-V2X into the construction of smart cities and smart traffic systems. V2X will become an integral part of the smart city construction. The policy also mentioned the research and development of the 5G industrial virtual private network would be organized and conducted to integrate standards, technology, application, and deployment. Virtual private networks may become popular.
In this policy, MIIT explicitly described the IoT development plan and mentioned that it would promote the network transfer of 2G and 3G IoT services. This means that 2G and 3G networks will no longer carry IoT services. According to this policy, NB-IoT will be used to meet low-speed IoT requirements, LTE-Cat1 will be used to meet medium-speed IoT and voice call requirements, and 5G will be used to meet high-speed and low-latency IoT requirements. We can tell that NB-IoT, LTE Cat1, and 5G will become the three engines that drive forward the IoT services in China. We have tested the Cat1 module with networks of the three major telecom operators in China. In the network of China Mobile, the download and upload speeds (DL: 3.8 Mbit/s, UL: 0.5 Mbit/s) are low because China Mobile uses TD-LTE. China Telecom and China Unicom use FD-LTE, and therefore the download and upload speeds (DL: 9.6 Mbit/s, UL: 4.5 Mbit/s) on their networks are close to the theoretical speeds (DL: 10 Mbit/s, UL: 5 Mbit/s). The Cat1 module is cheaper, smaller, and requires less power than an LTE module. Therefore, it does not require any reinforcement in the cell towers or core networks of the operators. The Cat1 module will likely be widely used in the IoT industry.
The concept of "New Infrastructure" is the foundation of the policies above and the greatest driving force of 5G development in China. The development of information and communications technology (ICT, represented by 5G) is an important mission of New Infrastructure. ICT is the "new engine" that drives the digital and economic development of China. It accelerates the network-driven, digital, intelligent upgrade, and development of industries and society. Moreover, it facilitates the high-quality development of other industries and converts old driving forces into new ones. There are many articles about New Infrastructure on the Internet. Take a look at some if you are interested.
It has been one year since the commercial licenses of 5G were granted to the operators. Many apps and projects claim to be the first in the industry (or the world) to utilize 5G. Which of them will rock the world in the 5G era? Look at the consumer sector first. In South Korea, the number of 5G subscribers has reached 7 million, and more than 10% are 5G users. The average monthly data usage of South Korean 5G subscribers has tripled compared to 4G subscribers. Where do they use the data? You can find the answer in the following service promotion picture from LG U+, one of the three major telecom operators in South Korea.
If you are interested in these services, you can search for related videos on video websites, such as YouTube. LG U+ focuses its development on fields that can show the high-speed and low-latency benefits of 5G, such as virtual reality (VR), augmented reality (AR), and online games. They obtain high-quality and unique content by cooperating with content providers or investing directly in the production of high-quality content. Then, they use the content to attract new 5G users. When consuming the content, users can see the performance advantages of 5G networks. The advantage of good content is reflected in their strategy. Here are some video screenshots.
We can make a simple conclusion based on these video screenshots. In the 5G era, there will be a lot more video content. This is especially true in the consumer sector.
To fully enjoy AR, VR, and HD videos, customers need high-speed and low-latency 5G networks. Therefore, services based on videos are preferred by operators. Now, all they need is good content.
There is another trend in the consumer sector:
Network computers (NCs) were the focus at the 1996 COMDEX conference. Oracle, SUN, and IBM spoke highly of NCs at that time, and Oracle launched the world's first NC soon after the conference. Then, many products, such as Windows Terminal and low-price PCs, were released to reduce the total cost of ownership (TCO) of computers to about USD 500. This was also the time when the concept of "heavy server and light client" was proposed. The same concept was mentioned again today, many years after the 1996 COMDEX conference. However, "heavy server" has changed to "heavy cloud," and "light client" has changed from computers to various terminals, including mobile phones. When 5G rolled out, many concepts, such as cloud games and cloud desktops were proposed. 5G can make the concept of heavy cloud and light terminal a reality with support from edge computing and the benefits of high speed and low latency. There are many articles about cloud games on the Internet. Take a look at some if you are interested. In the 5G era, terminals are responsible for displaying content, users are only responsible for input, and the cloud (edge) is responsible for processing and storage. This could be another trend in the consumer sector.
After talking about the consumer market, let's look at the business scenarios in the 5G era. In the last year, more than 400 innovative 5G applications were developed in China, covering many sectors, such as industry, transportation, and healthcare. There are also more than 600 "5G+ Industrial Internet" projects in progress.
In June 2020, Alibaba Cloud Research and DAMO XG Lab jointly published a research report on 5G smart application scenarios. We analyzed various categories of application scenarios in this report. With strong government policy support, new industrial infrastructure construction will bring about many opportunities for industrial enterprises to reshape their infrastructure. More industrial enterprises will embrace 5G. Many of them have already benefited from the efficiency increase as a result of factory digitalization. 5G will increase their benefits. According to GE, spending 1% of an industrial enterprise's budget on informatization can create more value for the enterprise. In 2019, we had more than 372,800 industrial enterprises with an annual main business income higher than CNY 20 million (USD 2.88 million). The average annual income of these enterprises is CNY 283.74 million (USD 40.82 million). The value created by informatization in these enterprises could be unbelievably huge.
We are currently developing new apps based on the ecosystems of Alibaba and Alibaba's partners to meet the requirements of industrial enterprises and improve their production efficiency. To enjoy a high-speed ride, you need an expressway (5G) and a good car (an app that can leverage all benefits of 5G.) To some extent, we can compare 5G to a powerful livestreaming channel for enterprises. Enterprises can sell profitable products on this channel and make it sustainable. For Alibaba, we are proud to sell the following products on this channel. Of course, more products will be added, and we encourage you to join us.
What is 6G? When will it be created? What can it do in our lives? Where can 6G be implemented? You may have more questions on 6G. After issuing 5G licenses, China began 6G research. On November 3, 2019, China set up a national-level 6G research working group and expert group, marking the kick-off of formal 6G research and development in China. Currently, the 6G research in China mainly focuses on the following theories and technologies: basic theories and technology on large-scale wireless communications at the physical layer, terahertz wireless communication technology and systems, new antenna and radio frequency (RF) technology for cell tower-oriented large-scale wireless communications, key technologies for mmWave-integrated RF front-end systems that are compatible with the C band, and the technology for RF front-end systems based on the third-generation compound semiconductors. We care more about scenarios than technology evolution. After all, we must solve real-world problems. A paper from Bell Labs shows us the direction of the 6G application scenarios. Here is a figure from the paper for your reference:
In the future, the physical, digital, and biological worlds will be connected to make our lives better.
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