2019 is a year of "mixed good and bad" for communications operators. "Happy" in: In 2019, communication operators got on the 5G express, and the large-scale commercial use of 5G was officially launched. Following this are new services such as Internet data centers, big data, cloud computing, artificial intelligence, etc., which are driving the rapid growth of revenue from fixed value-added and other services of communication operators. As operators invest in building 5G networks, they also need to update and expand existing networks.

"Worry": In this year, the Ministry of Industry and Information Technology continued to require operators to carry out in-depth network speed-up and fee-reduction work, launching the broadband "dual G double-lifting" action plan, and promoting a 15% reduction in average broadband tariffs for SMEs and a reduction in average mobile network traffic tariffs 20% etc. The superposition of many factors makes it difficult for operators to return to the track of high-speed growth in the short term, and the growth of the telecommunications industry has entered a low range. Therefore, operators have also been "difficult" this year. While vigorously building networks to increase speed, they are also deliberately or unintentionally lowering network construction costs. This is also fully reflected in some centralized procurement.

Let us review the major events of the three major operators in 2019:

Centralized procurement of transmission pipeline projects in 31 provinces of China Mobile

Time is back. On November 27, 2018, China Mobile launched the 48.5 billion transmission procurement ceremony. The transmission pipeline project is called a grand ceremony because of the large scale of the project and the wide area involved. The construction of transmission pipelines in 31 provinces across the country has been started; the total budget exceeds 48.2 billion yuan (excluding tax), and there are 22 provinces with a budget of over 1 billion; a rare number of 471 bids.

In January 2019, this huge transmission procurement ceremony that has attracted the attention of the industry publicized the procurement results. There were as many as 168 bid-winning companies, and the total winning bid exceeded 48.5 billion yuan. China Mobile Construction has won a total of 211 bids, with a total winning bid of over 8 billion yuan. At the same time, China Mobile Construction will participate in China Mobile's transmission pipeline projects in 31 provinces. The second, fourth and third engineering bureaus of China Post Construction and Zhongtong Construction have also achieved very good results. In addition, the three private enterprises of Wuhan Best, Nanjing Jiahuan and Nanjing Xinwang ranked sixth, seventh and eighth respectively. It is not easy to achieve such excellent results as private enterprises!

China Mobile's 18-province wireless network optimization project is publicly collected

At the beginning of 2019, China Mobile launched a large collection of wireless network optimization in 18 provinces including Hubei, Sichuan, Zhejiang, Chongqing and Henan, with a total budget of over 5 billion yuan. This is also another batch of large-scale centralized procurement by China Mobile following the centralized procurement of wireless network optimization in 11 provinces in March 2018.

The result of the bidding was announced, and the winning bid price of Wangyou people was also announced: 17 companies won the bid, and the average bid discount was only 30.94%, and the lowest discount was only as low as 20%. Huawei won the share of 17 provinces and was also the biggest winner of this centralized procurement. ZTE won 12 provinces, Nokia 5, and Datang 3. Only Huawei, ZTE, Nokia and Datang accounted for four equipment manufacturers. 37 shares, accounting for nearly 60%.

5G experimental terminals continue to collect

On June 6, 2019, the Ministry of Industry and Information Technology officially issued four 5G licenses. On the same day, China Mobile announced the completion of the largest delivery of 5G terminals-10,000 units of 11 5G terminals, including Huawei, OPPO, vivo, ZTE, Xiaomi, OnePlus, Samsung, TCL and China Mobile’s own brand smartphones and Data CPE. The first batch of terminals is expected to obtain the national network access permit in July, and it is expected that the market will begin to be launched one after another at the end of July.

China Mobile is the first operator to start the centralized procurement of 5G experimental terminals.

In February 2019, China Mobile took the lead in launching the first batch of 5G trial terminal centralized procurement, purchasing a total of 502 units, with a single unit price limit of up to 80,000 yuan. In the end, Huawei and ZTE won the bid.

Immediately afterwards, in early May, China Mobile launched the second batch of 5G trial terminal centralized procurement, purchasing a total of 2,700 5G trial terminals, with an estimated total value of over 30 million yuan, far exceeding the first batch.

In December of the same year, China Mobile once again launched the third batch of 5G trial terminal centralized procurement, purchasing a total of 8,350 5G terminals, and Huawei took the lead with absolute share.

In addition, China Mobile Terminal Corporation once purchased 17,100 5G test terminals on a large scale. The specific terminal manufacturers involved are: Huawei, ZTE, Xiaomi, OPPO, and vivo.

Centralized procurement of 5G wireless network and bearer network, 5G construction officially started

On October 31, 2019, the Ministry of Industry and Information Technology and the three major operators held a 5G commercial launch ceremony. The aftermath of the ceremony was still there. In November, China Mobile launched the centralized procurement of 5G wireless networks in 31 provinces. This is China Mobile's first large-scale 5G wireless network procurement, with a centralized procurement scale exceeding 37.488 billion yuan (excluding tax).

Subsequently, China Mobile officially launched the large-scale centralized procurement of SPN equipment, which means that China Mobile's first 5G bearer network construction officially kicked off. The 5G scale construction will officially start in 2020.

Three operators' centralized procurement of optical fiber and cable, the price of centralized procurement is cut in half

Centralized procurement of optical fiber and cable is indispensable for network construction.

In February 2019, China Mobile started the centralized procurement of ordinary optical cable products in 2019, with an estimated procurement scale of about 105 million core kilometers. Although it is a big cake of 105 million core kilometers of optical fiber cable, the taste of this cake is bitter. Compared with the same period last year, China Mobile’s optical fiber centralized procurement price "halved" this year, from 60 yuan to 30 yuan. The profits of manufacturers have also fallen precipitously, and they even lost money to receive orders.

Since then, China Unicom’s G.654.E trunk optical fiber cable collection has set an incredible ceiling price (62 yuan/core kilometer) far below the cost price, and optical fiber and cable manufacturers have voted with their feet. The bid was lost and the bidding had to be re-bid. In the end, according to relevant sources in the industry chain, the winning bidder's price was around 200 yuan/core kilometer.

This year, China Telecom also launched the centralized procurement of G.654.E trunk optical cables. With the lessons learned from China Unicom and the background that China Telecom has been committed to promoting the healthy development of the industrial chain over the years, the centralized procurement of the project was successfully completed.

Three operators continue to expand the backbone network

For operators, to save operating costs, improve efficiency and service quality, it is inseparable from the construction of backbone networks. The three major operators attach great importance to the construction of backbone networks.

At the beginning of 2019, China Unicom stated that in order to meet the need for intensive maintenance of the transmission network, it plans to carry out a centralized transformation of the network management set up according to the regional system. The network management transformation of China Unicom's backbone transmission network mainly involves the network management equipment of five companies: Huawei, ZTE, FiberHome, Bell and Crean.

In April, China Telecom initiated the procurement of core routers for ChinaNet's international network (domestic segment) expansion project, and Huawei won the bid exclusively. What is interesting is the bidding price given by Huawei: new model: 20,000 yuan (price); expansion model: 23,487,552 yuan (price). As a result, the price difference between new construction and expansion has reached 1174 times!

In August, China Mobile also launched the eleventh phase of the CMNet backbone network expansion project for centralized procurement.