China Broadcast Network (CBN), China's newest mobile operator, has issued a tender for the radio access portion of its national 5G network.

CBN's network partner China Mobile is running the tender, which seeks the supply of 480,400 5G macro basestations in the 700 MHz band – roughly equivalent to the number of 2.6 GHz basestations already deployed by China Mobile. The tender is a milestone for the China telecom sector, marking the start of the rollout of the new entrant, who is also the first operator not be linked to the Ministry of Industry and IT.

Figure 1: Checking progress: CBN is likely to start 5G services in late 2021 or early 2022 - even if they don't hit ambitious roll out targets.
(Source: zhang kaiyv on Unsplash)

As one of the biggest network procurements of the year, it's also a big deal for the world's telecom vendors. Going by recent practice Huawei and ZTE can expect to win approximately 85% of the business.

Big numbers

Ambitiously, CBN and China Mobile are reportedly promising to deploy 400,000 basestations this year. That seems unlikely – it took the incumbent operators nearly two years to reach that mark – but it seems certain that CBN will offer its first commercial services late this year or early 2022. The bid documents state that the tender is fully funded, a positive sign for the cash-strapped CBN.

The newcomer and its giant partner signed a network sharing partnership in January, agreeing to jointly invest in the rollout at a ratio of 1:1. Additionally, China Mobile will provide backhaul, operation and maintenance services and access to its other networks, including its 2.6GHz 5G where CBN has no coverage. Commercial terms for these have not been disclosed.

CBN says the network will be configured around video and streaming to serve its existing cable TV customer base and to provide differentiation from the incumbent telcos. The rollout will include 5G mobile broadcasting capabilities, including 3,000 transmission towers.

Playing catch up

But questions remain about CBN's financial depth and its ability to build a viable business against entrenched players. The company is capitalized at 101 billion yuan ($15.6 billion), with the state National Radio and TV Administration owning 51% and Alibaba and utility giant State Grid owning 9.9% each. Its partnership with China Mobile ensures it will avoid a good deal of capital cost, but it also means it will have high operating costs to manage.

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Its viability then turns on whether it can carve out a business against incumbents. As Rakuten in Japan is learning, it is not easy to compete against big legacy players each with a large installed base and deep marketing channels. Even in the capital markets, CBN may find itself competing again with its industry rivals.

China Mobile expects to raise $6 billion in its return to the Shanghai board following its eviction from the NYSE; China Telecom anticipates raising $4 billion. Their listings are expected in the second half of the year.

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— Robert Clark, contributing editor, special to Light Reading