On 13 August 2020, China Mobile published its performance report for the first half of 2020. During this period, the operating costs of the company increased drastically by 10.7 billion RMB, an astonishing increase partly resulted from increased power consumption of its 5G base stations.
According to various analysts, one single 5G base station needs two to three times more the electricity used by one 4G base station; one interviewee from China Tower revealed that the cost of electricity for operating 100,000 5G base stations is estimated at around 2 billion RMB each year. Indeed, according to data released by China Mobile, the telecom giant had established 188,000 5G base stations by the end of June 2020, from which it can be calculated that the electricity costs of its 5G base stations accounted to around 4 billion RMB.
This enormous power consumption of 5G base stations may in part explain why China Mobile has been reluctant to deploy rapidly its 5G network. By comparison, around 700,000 4G base stations were established by China Mobile alone in the first year of construction of the 4G network – confirming that the progress of 5G network is significantly slower compared to its predecessor. It is noteworthy that, by July 2020, a total of around 400,000 5G base stations had been established by China’s three major telecom operators (China Mobile, China Unicom and China Telecom).
In addition to expensive operating costs, the costs for the construction of the 5G network are also much higher compared to its predecessor: 5G base stations have a smaller coverage than 4G base stations, thus requiring a much higher density which cannot be achieved by only upgrading existing stations. As if it were not enough, the wireless download speed of 5G base stations is one hundred times as much as that of 4G base stations, therefore the existing optical fibre transmission network cannot support the 5G network unless it is strengthened or rebuilt – which is way more difficult and costly.
For these reasons, the progress of deployment of the 5G network has been below the expectations. Even if China’s three major telecom operators achieve the goal of building 600,000 5G base stations by the end of 2020, the scale of the network will still be much smaller than that achieved by China Mobile in the first year of the 4G network. It does not come as a surprise, therefore, that the establishment of a 5G network with nation-wide coverage is projected to take another three to five years.