China Mobile: This year, 5G invested 24 billion yuan in annual capital expenditure up to 166 billion yuan


Author: Laisasha
Yang Jie said that the 50,000 base stations built by China Mobile this year support both SA and NSA.
China Mobile will invest about 24 billion yuan in 5G network construction this year.
On August 8, at the earnings meeting, Yang Jie, chairman of China Mobile, said that China Mobile’s annual capital expenditure this year did not exceed 166 billion yuan, a decline compared with last year’s 167.1 billion yuan, of which investment in 5G is expected to be 25 billion yuan.
According to the plan, China Mobile will build more than 50,000 5G base stations nationwide this year to realize 5G commercial services in more than 50 cities.
He pointed out that for 5G to be realistic and actively promote, the current 5G technology, industry maturity still needs time, to grasp the rhythm.
“Even considering 5G, total capital expenditure will not increase substantially.” Yang Jie said that 2020 to 2022 is the peak period of 5G investment, but China Mobile will control the total investment.
Controlling investment is inseparable from the background of negative growth of telecommunications industry as a whole. At noon on August 8, China Mobile released its first half of 2019 earnings. The report shows that in the first half of this year, China Mobile’s operating income reached 389.4 billion yuan, down 0.6% from the same period last year, of which 351.4 billion yuan was the main telecommunications service income, down 1.3% from the same period last year; shareholders should account for 56.1 billion yuan of profit, down 14.6% from the same period last year. After the first quarter of this year, China Mobile’s revenue and net profit continued to decline.
According to the economic operation of the telecommunications industry in the first half of 2019 announced by the Ministry of Industry and Information Technology, the revenue of telecommunications business reached 672.1 billion yuan, down 0.03% from the same period last year. Fu Liang, a telecommunications analyst, said that this was the first time in years that the Ministry of Industry and Information Technology announced negative growth in telecommunications revenue. Specifically, in June, the actual revenue of telecommunications business was 113.1 billion yuan, and that month’s revenue of telecommunications business fell by more than 1.1% year-on-year.
China Mobile pointed out that the total capital expenditure will not increase significantly in the next year, but this does not represent the attitude towards 5G. “No matter how the total investment is controlled, the proportion of 5G in total investment is still very large. This year’s investment of 24 billion yuan is still very large. We also see the development prospects of 5G, including 2B business and some social needs.
China Mobile will adjust its investment structure. After the increase of 5G investment, China Mobile said that it would greatly reduce the investment of many traditional businesses in the past, “including 4G, which will be operated by 5G + 4G mode, and meet the needs of 4G through the reverse opening of 5G investment. In addition, the next step is to reduce the unit input cost to control the overall investment.
On the same day, Yang Jie also responded to questions about SA/NSA. In June, Yang Jie’s phrase “Next year does not support 5G NSA mobile phone access to the Internet” instantly triggered a thousand waves, triggering controversy between real and fake 5G mobile phones.
Unlike 2G/3G/4G, 5G era defines two networking modes for rapid deployment. Among them, NSA is a transitional scheme, relying on the work of 4G base station and core network, while SA core network is a new network architecture, which can give full play to 5G capabilities, but the investment is greater, and network construction takes longer.
Yang Jie explained at the 8 th financial meeting that the new mobile phone should have SA/NSA mode at the same time since January next year. SA is the target architecture. “This year, due to the immaturity of technology and industry, we deployed NSA. I believe next year is SA architecture. But I can make it clear that the 50,000 base stations we built this year are both SA and NSA-enabled base stations. After the deployment of our SA network, the base station hangs on the SA core network at the same time, which can support the SA and NSA modes, so that 5G can be both 2C and 2B.
Just in March this year, the three major operators at the 2008 earnings conference said they would decide whether to expand investment next year based on the results of this year’s scale test. China Unicom said it was prudent to invest in 5G. China Telecom believed that the 5G industry chain still needed to be mature. China Mobile said it was pragmatically and prudently promoting the construction of 5G network this year.
However, on June 6 this year, the Ministry of Industry and Information Technology issued basic telecommunications business licenses to China Telecom, China Mobile, China Unicom and China Radio and Television, marking the official launch of 5G commercial in China.
Yang Jie pointed out that at the beginning of this year, China Mobile planned to build 30,000 to 50,000 5G base stations this year. After issuing 5G licenses, China Mobile clearly built 50,000 base stations.