Radio, television and mobile determine the network construction plan, the industry co-construction and sharing deepens, and the trend of competition and cooperation continues.China MobileChina Mobile Limited and China Radio and Television Network Co., Ltd. signed a 5G cooperation framework agreement on May 20, which includes the joint determination of a network construction plan and a joint investment in 700MHz 5G wireless network at 1:1, while both parties jointly have the right to use 700MHz 5G wireless network assets. This cooperation will further deepen the co-construction and sharing of the communications industry, optimize the network construction and operation and maintenance costs of operators, and more quickly maximize the performance of the 5G network. We expect that China Radio and Television, as a new entrant to the market of telecom operators, may increase the competition in the whole market at the initial stage of market expansion. Adopting the mode of co-building and sharing is conducive to avoid intensified competition in the industry, and at the same time improve the service and network quality of operators, which is the continuation of the trend of competition and cooperation in the market of telecom operators.
China Radio and Television brings new investment, and the number of 5G base stations is expected to increase according toChina Tower CorporationAccording to the 2019 annual report, by the end of 2019, China Tower Corporation had received a demand for 1500 radio and television 5G stations in some provinces and cities. Compared with the data disclosed by the Ministry of Industry and Information Technology, as of February 2020, the three major operators have opened about 156000 5G base stations nationwide. We believe that with the cooperation between China Mobile Limited and China Radio and Television, the scale construction of 700MHz 5G base stations and the overall number of new 5G base stations are expected to be further improved.
Co-construction will strengthen 5G service capacity of radio and television, fully realize the commercial value of 700MHz band resources, 5G 700MHz "golden band" is one of the core advantages of radio and television, while radio and television mainly carry out nationwide cable television network related business, lack of business experience of operators, and are relatively weak in capital, talent and technology. After cooperation with Mobile, China Mobile can obtain the 700MHz band and improve its 5G advantage, while radio and television can greatly strengthen its service capacity of operators, speed up the technological development of radio and television and personnel training, and co-construction and cooperation will help to fully realize the commercial value of 700MHz band resources.
5G network helps radio and television to develop vertical industry application scenarios
We believe that after obtaining the 5G network, radio and television will carry out individual user business and vertical industry business at the same time. In addition to personal communication business, Radio and Television will also focus on commercial development of application scenarios based on 5G network while stabilizing its traditional cable TV business. Such as ultra-high definition video, Internet of things, intelligent radio and television, and so on. We believe that these are the traditional advantages of the radio and television industry, and they also have great imagination in space. Through co-construction and sharing with China Mobile to obtain high-quality 5G network assets, and learn from China Mobile's operation experience, fully tap the value of its own stock of users, and cultivate new business growth points.
Investment suggestion
We believe that the cooperation between China Mobile Limited and China Radio and Television can achieve complementary resources, which is not only expected to greatly optimize the network construction and operation and maintenance costs of operators, but also quickly maximize the performance of the 5G network, while further continuing the trend of competition and cooperation among telecom operators. In addition, China Radio and Television has brought new investment, and we expect the number of 5G base stations to increase. The radio and television industry can obtain high-quality 5G network assets, carry out personal and vertical business, and cultivate new growth points. The communications industry recommends paying attention to operators, main equipment, optical modules and optical devices, wireless equipment and transmission equipment, with emphasis on recommendation.ZTE Corporation、Zhongji Xuchuang、China Unicom、Sega Technology、Star net RuijieWait. Attention of radio and television industryHubei Radio and Television、Guiyang-Guangzhou network、Guangxi Radio and Television、Huasu Media、The Oriental Pearl、Radio and television network、Tianwei Video、Gehua CableWait.
Risk hint: the progress of 5G construction is not as expected, and the development of 5G application scenario is not as expected.