Edited by Everbright Securities: "5G: the beginning of the first year, the Internet of everything-- one of the 5G series of in-depth reports"

From a certain point of view, human history is a history of communication, from the ancient beacon, pigeon transmission, post-horse mail to the modern telegram, telephone, network, the development of communication technology promotes the continuous development of human society. As for mobile communication technology, 5G is undoubtedly the next station for the development of mobile communication technology, and 2019 is expected to become the first year of 5G.The issuance of 5G licenses will be the catalyst for the secondary market.

1. 5G era: break through the boundary of Zhaopin and expand the application scene

4G is easy to use, why do you need 5G?Compared with 4G standard, 5G standard has better performance in terms of speed, traffic density, connection number density and so on.

3GPP defines three major technical scenarios for 5G, namely eMBB,mMTC and URLLC.EMBB refers to high-traffic mobile broadband services such as 3D/ ultra high-definition video; mMTC refers to large-scale Internet of things services; and URLLC refers to services with low latency and high reliable connection.In the specific application scenarios, 5G will be widely used in VR/AR, vehicle networking, intelligent manufacturing and other fields.

The high performance of 5G network has greatly expanded its application scenarios, according to Huawei's "White Paper on Ten Application scenarios in 5G era"The application scenarios that best reflect 5G capabilities can be divided into 10 categories, including:

High-level VR/AR applications, self-driving and remote-controlled driving in vehicle networking, robot control in intelligent manufacturing, feeder automation in smart energy, remote diagnosis in wireless medicine, ultra-high definition video in wireless home entertainment, networked drones, panoramic live streaming in social networking, personal assistance in AI, video surveillance in smart cities.

2. 5G Great Power: the United States and China are expected to become global leaders

Why does our country attach so much importance to the development of 5G?From a strategic point of viewUpstream, 5G can promote the breakthrough of national core chips and promote the overall upgrading of the entire communications industry chain; in the middle reaches, Huawei, ZTE and other major equipment companies will increase their share of the global market and have a growing voice; downstream, China has the world's largest communications market, with huge demand and huge demographic dividend.

From the perspective of economic development, the development of 5G will directly bring about the rapid growth of telecom operation, equipment manufacturing and information service industry, and then make a direct contribution to the growth of GDP.And magnify the contribution of 5G to economic and social development through the correlation effect and ripple effect among industries.That is, indirectly drive all industries and fields of the national economy to create more economic value added.

According to the estimates of the China Academy of Information and Communications, in China, in 2020, the GDP directly pulled by the 5G network is 92 billion yuan, and the GDP indirectly pulled is 419 billion yuan; by 2030, the GDP directly pulled by the 5G network is 2.9 trillion yuan, and the GDP indirectly pulled is 3.6 trillion yuan.

According to IHS's research results, the United States and China will be far ahead of other countries in investment in 5G, leading the construction of 5G.According to the research results of "5G economy: how 5G Technology affects the Global economy" released by IHS, the United States and China are expected to lead the world in 5G investment, accounting for about 28% and 24% of global 5G investment.

3. 5G construction time: the current overall plan is the scale test in 2018, the launch of pre-commercial products in 2019 and the large-scale commercial use in 2020; at present, 5G commercial use has entered the acceleration period, and the spectrum is planned to be released in September.

At the end of July this year, the Ministry of Industry and Information Technology and the National Development and Reform Commission issued the three-year Action Plan for expanding and upgrading Information consumption (2018-2020), proposing to speed up 5G standard research and technical testing, and promote 5G network construction and application demonstration projects. ensure the launch of 5G commercial use. On Smart China Expo last week, Wang Zhiqin, vice president of China Information Communications Institute, saidThe domestic 5G test in 2018 has entered the critical period of the third phase, and the independent networking test of the 5G test is expected to be completed by the end of the year.At the same time,The final licensing scheme for 5G spectrum resources is scheduled to be officially released in September this year, and operators are expected to carry out 5G network networking and testing in more domestic cities by the end of this year.A few days ago, the three major operators have basically identified the first batch of 18 5G pilot cities, and 5G testing work is in full swing.

4. 5G industry chain: antennas, radio frequencies, optical modules and other key devices benefit first and benefit most as the main equipment. Finally, we pay attention to the application and integration development of various vertical industries.

1) first to benefit:The initial stage of construction (from 2019) will be the pre-commercial and commercial stage of scale.The core components such as base station antenna, radio frequency module and optical module will be half a year earlier than the main equipment.

2) maximum benefit:Main equipment accounts for the largest proportion of investment (nearly 40% of the total investment)Involving devices such as wireless, core and partial transmission

3) most long-term benefits:With the improvement of the network foundationVertical Industry Convergence and Information Application Service based on 5G NetworkWill emerge one after another, including system integration and industry solutions, big data applications, Internet of things platform and solutions, value-added services and industry applications and other needs will scale up, the corresponding industry chain will also continue to benefit.

In addition,Network planning, operation and maintenance will benefit from the early construction and completion of the network, and optical fiber and cable will benefit from the construction of wireless network and the expansion and upgrading of transmission network.

5. 5G spectrum division and license issuance: the catalyst of the secondary market.

Compare the performance of CITIC Communications Index and CSI 300 IndexThe market of the communications sector in the secondary market is usually started about a year before the spectrum division and license issuance, and the catalytic effect of license issuance on the market is usually more obvious.3G, 4G period, spectrum division, license issuance gave birth to the secondary market communications sector market usually lasts about 2-3 years. With the upgrading of communication technology, the scale of related investment continues to increase, the higher the excess return of the communications sector, the longer the duration of the market.The investment scale of 5G is 1.7 times that of 4G, and we expect the 5G spectrum to be confirmed between the end of 2018 and early 2019, and 5G licenses are expected to be issued in mid-2019.