BEIJING, Oct. 21 (Xinhua) -- A series of new infrastructure plans for the 14th Five-Year Plan period (2021-2025) recently have been intensively introduced in many regions across China, making 5G construction a priority, the Xinhua-run Economic Information Daily reported on Tuesday.
Meanwhile, local governments are continuously unleashing policy suport to push forward 5G network construction.
It is learned that operators reported surging demand and prices in centralized procurement programs.
With 5G development entering the key stage of commercial deployment, the new round of 5G construction is being accelerated and 5G-related enterprises across the industrial chain are expected to witness a long-list releasing of rosy performance results in the third quarter.
--Critical stage for 5G commercial use
It is obvious that the new round of 5G construction is being accelerated in China.
Recently, Sichuan Province has issued its 14th Five-Year Plan for New Infrastructure Development, which sets forth quantitative indicators for 5G construction.
According to the plan, the number of 5G base stations in Sichuan will be increased from 36,000 in 2020 to 250,000 in 2025, and the user coverage of 5G networks will be increased from 11 percent to 60 percent.
Many provinces have already issued their new infrastructure plans for the 14th Five-Year Plan period, making 5G networks one of their priorities.
Pan Feng, deputy director of the Research Center for Radio Management of the China Academy of Information and Communications Technology, noted that at this critical time for the commercial use of 5G, China is pushing up 5G network construction "appropriately ahead of schedule".
The central government of China has promulgated policies to guide 5G network construction and local governments actively follow up with favorable policies.
Surveys show that 92.3 percent of prefecture-level cities have issued policies in favor of 5G construction. By the end of August 2021, local governments had issued nearly 570 5G-related policies, including 67 at provincial level, 259 at city level, and 243 at district level. A majority of such policies have set specific targets for speeding up 5G network construction.
Operators are expected to enhance investment in the second half of the year.
According to insiders, the 5G construction outcome in the first half of this year is a bit far from the target of 600,000 base stations, while operators stress they would not betray their 5G budget for the year, suggesting larger capital expenditure on 5G in the second half of this year.
Huaxi Securities holds that the three major operators' capital expenditure in 2021 increased 2 percent year on year and that on 5G increased 5 percent year on year, implying a new round of growth in the industry in the next two or three years.
-- Over 60 percent of companies optimistic about Q3
With 5G commercial use entering the key stage, China's telecommunications industry has so far reported stable growth this year.
According to the Ministry of Industry and Information Technology, from January to August, the income of China's telecommunications business totaled 991.9 billion yuan, a year-on-year increase of 8.4 percent, and the number of 5G base stations in China was 1,037,000, accounting for over 70 percent of world's total, covering all cities at prefecture level and above and connecting more than 80 percent of 5G terminals on the globe.
Enterprises involved in the industrial chain are releasing their performances.
Data showed that 67 percent out of the 75 companies that had published their performance forecasts for the third quarter of this year gave positive forecasts.
ZTE, a leading 5G company, recently forecasted its net profit attributable to common stockholders will reach 5.6-6 billion yuan in the first three quarters, up 106.49-121.23 percent year on year.
Operators also report performance growth quarter by quarter.
Soochow Securities believes new infrastructure policies continuously benefits the entire industry.
In the first half of 2021, operators' business revenue hit 383.411 billion yuan, up 11.39 percent year on year, and the net profit distributable to parent companies was 21.776 billion yuan, up 25.92 percent year on year.
China Unicom and China Telecom said recently that they would begin trial commercial application of 5G messaging in the fourth quarter of this year.
China Mobile also said it had done this for many provinces and cities across China.
Huatai Securities predicts the market size of 5G messaging would be over 60 billion yuan in 2025 and, in a long run, 5G messaging would change the business mode of the Short Messaging Service (SMS) industrial chain and shape a new competition pattern.
Soochow Securities suggests that, first, major equipment suppliers will continue to benefit from the steady progress and increasing input in 5G construction, and second, as 5G coverage expands, operators expect rebound of C-end business and rapid growth of B-end business, implying noticeable opportunities for investment in the operator segment.
Chuancai Securities expects booming growth of product terminal and application scenario including Ultra HD video, cloud games, AR/VR, Internet of Things, Internet of Vehicles, Industrial Internet, and ubiquitous power Internet of Things (IoT).(Edited by Yang Yifan with Xinhua Silk Road, yangyifan@xinhua.org)
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