Chinese Government Presents Bold “Sailing Plan” to Transform Industries

The commercial launch of 5G has already started in 2019. China is one of the leading countries that is aggressive with its 5G deployment, allowing the country to maintain/advance its position as the world’s leading manufacturing nation and be ready for the fourth generation of the industrial revolution. According to ABI Research’s data analysis, as of July 2021, China has deployed more than 900,000 5G base stations and planned to increase the number to 2,500,000 by the end of 2023. Apart from that, the country also sets targets to have 40% 5G individual user penetration rate, 50% 5G data traffic rate, 35% 5G penetration in the large industrial enterprises, and many other by the end of 2023. All these goals have clearly indicated that the Chinese government’s ambition on 5G development in both consumer and enterprise markets, as set by the Central Government’s “Sailing Plan”, which was announced in July 2021.

With more than two years 5G network deployments, Chinese operators collaborated with their ecosystem partners have achieved remarkable results, offering mobile subscribers and industrial customers much better network connectivity than 4G. As many excellent case studies have emerged, the government and key stakeholders are now planning to promote and popularize the solutions at a scale, which is not an easy task and needs all parties to work together to form a shared goal and speed up the progress. In such a context, the Ministry of Industry and Information Technology of P.R.C., together with other eight government sectors, published a 5G implementation “Sailing Plan” (2021-2023) to build a standardized and scalable 5G application use cases with broad supplier ecosystem, aiming to fully empower the digitalization of all walks of life.

According to the current 5G capability and its future development trends, the Chinese government in the “Sailing Plan” has qualified seven objectives in three main categories, which will be used to evaluate the level of success for the 5G development and deployment. These objectives are listed below.

• 5G subscribers: 5G individual subscribers and data traffic coming from 5G should reach 40% and 50% penetration rates, respectively. These numbers are used to measure the popularity of 5G applications, especially in the consumer market.
• 5G enterprise applications: The 5G IoT terminal user annual growth rate is expected to reach 200%, the number of 5G application models in each key vertical should be no less than 100, and 5G penetration rate in the large industrial enterprises should reach 35%.
• 5G network capability: The number of 5G base stations shared by 10,000 civilians and the number of 5G industrial private networks should reach 18 and 3,000, respectively.

Unlike the conventional wireless technology, such as 2G/3G/4G, the Chinese government expects 5G to have the ability to influence the national wide economy growth via empowering thousands of industries. To achieve this goal, the “Sailing Plan” states that multiple technologies, such as cloud computing, big data, artificial intelligence, blockchain should jointly work with 5G to provide robust and efficient application strategies. Moreover, network operators collaborated with their ecosystem partners are required to create more meaningful application use cases that can help industrial verticals access the transformative benefits of 5G. Meanwhile, the government and relevant organizations will take part in and foster 5G developments by making regulations, standards and policies.

To enable applications for thousands of industries, the development of 5G needs to give priority to use cases with higher demands. Once the developments are getting more mature, they will be then expanded to broad verticals. With this consideration, the “Sailing plan” sets out 15 typical 5G applications in three domains, including the integration between information consumption and multi-media; The digitalization of real economy applications, such as industrial IoT, V2X, smart logistics, smart port, smart mining, smart energy, smart oil gas, and smart agriculture; The service improvement of people’s livelihood, such as smart education, smart healthcare, and smart city. With these pioneer applications, the government aims to build 5G innovation application exemplars that can help more enterprises understand the true meaning of 5G.

From the network perspective, the “Sailing plan” has detailed some key requirements and focuses for mobile operators and equipment vendors. The first and foremost is to speed up the Standalone (SA) 5G network and gigabit fibre deployments with network coverage expansion from urban to rural areas. New 5G network deployment must fully support IPv6, and 5G coverage needs to be strengthened for in-building, underground, key transportation junctions and high-speed train scenarios. Apart from those, the end-to-end network slicing, mobile edge computing, and high precision indoor positioning are three key technologies that should be well developed to improve the performance and the coverage of 5G private networks in Free Trade Area, industrial campuses, factories, and hospitals. Efficient spectrum allocation is another key focus in the “Sailing plan”, where relevant authorities should speed up the 700MHz allocation for 5G and build sound systems to guarantee the effective mmWave spectrum utilization.

For the time being, 5G has likely hit a plateau in terms of new application development, which means new application use cases are required to stimulate the development progress of the technologies as mentioned above. From ABI Research’s point of view, the demand and the supply should be well balanced so that the full potential of 5G can be well exploited. This is probably one of the reasons that the Chinese government developed and announced the “Sailing plan”. The “Sailing Plan” is a stark contrast to Western markets, where the actual market decides what is successful or not, based on a variety of priorities and strategic decisions. On the other hand, the Chinese government wants to accelerate the digitization of industries in a more aggressive manner, surely with an eye towards the Western world and the geopolitical challenges it has been facing. Although not guaranteed, the “Sailing Plan” may be what 5G needs to succeed in China, but the unified global standardization will be the key to a healthy economy and true technological revolution.