Recently, the Ministry of Industry and Information Technology (MIIT) granted permission to China Telecom to repurpose the 800MHz frequency band, which was previously used for 2G/3G/4G systems, for public mobile communication systems in 5G.
Industry insiders pointed out that with China Unicom (in November last year) and China Telecom obtaining licenses for Sub-1GHz low-frequency spectrum for 5G, it will help compensate for the previous disadvantages in 5G coverage and base station price competition. This will promote the rapid and widespread adoption of 5G signals by China Unicom and China Telecom, creating a competitive synergy with China Mobile and China Broadcasting Corporation's 700MHz base stations, and driving deep coverage of 5G signals in China. It will also accelerate the development of large-scale 5G applications and IoT services for operators.
Coverage is the key: Favorable news for China Telecom's 5G network
Since entering the mobile communication market, the 800MHz frequency band has always been one of China Telecom's core competitive advantages. As early as the 3G era, China Telecom deployed its 3G network primarily in the 800MHz spectrum, building a widely covered 3G network with high cost-effectiveness. In the early stages of the 4G era, China Telecom continued the low-frequency strategy and received positive market feedback.
However, in the 5G era, China Telecom's main frequency bands for 5G networks are 2.1GHz and 3.5GHz. Although the 3.5GHz high-bandwidth spectrum has advantages in speed and capacity, the network construction cost is high, while 2.1GHz base stations are mainly used for deep coverage.
The 800MHz frequency band has characteristics such as low propagation loss, wide coverage range, strong penetration capability, and low network deployment cost, making it suitable for public mobile communication network coverage in rural and remote areas. By allowing China Telecom to use the 800MHz frequency band for 5G services, the supply of high-quality spectrum resources below 1GHz for 5G in China is further strengthened, benefiting rural and remote communities by providing them with high-quality 5G services.
Operators' 5G network coverage capabilities will return to the same starting line
Among the major telecommunications operators, China Mobile and China Broadcasting Corporation were the first to obtain licenses for Sub-1GHz low-frequency spectrum through joint construction and sharing. On January 26, 2021, China Mobile Communications and China Broadcasting Corporation signed a series of cooperation agreements, jointly building and sharing a 700MHz 5G wireless network using all the frequencies authorized by the relevant national departments for China Broadcasting Corporation. As of the end of June this year, China Mobile and China Broadcasting Corporation had 578,000 700MHz 5G base stations.
China Unicom, on the other hand, obtained approval from the MIIT in November 2022 to repurpose the 900MHz frequency band (mainly involving the 904-915/949-960MHz band) for 5G systems, further enhancing the coverage quality of 5G signals in rural and remote areas. Last year, China Unicom invested over 20 billion yuan to build 179,000 900MHz 5G base stations. This month, China Unicom launched a 40.239 billion yuan procurement of 5G equipment, including a considerable proportion of 900MHz 5G base stations.
It can be expected that with the implementation of spectrum licenses, China Telecom will also initiate a large-scale procurement of 800MHz 5G base stations. At that time, except for remote areas, the three operators will return to the same starting line in terms of 5G network coverage capabilities.
The Ministry of Industry and Information Technology has always attached great importance to the coordinated supply of radio frequency resources for public mobile communication systems. Currently, a total of 1,109MHz of radio frequency bandwidth has been licensed to China Telecom and three other major telecommunications operators, with 73% of the spectrum resources available for 5G. This effectively guarantees the capacity and signal coverage requirements of 5G communications, placing China's low and mid-frequency 5G frequency resources at the forefront globally.