Chinese mobile operators received a financial boost for their massive 5G rollout plans, with the Shenzhen government offering a subsidy of CNY10,000 ($1,413) per base station.
The incentive from the Shenzhen City government is limited to 15,000 base stations, or CNY150 million, per operator. The city will also offer operators and infrastructure company China Tower free access to utility infrastructure, ducts and certain public spaces for 5G deployments, a move with the potential to reduce opex.
In a research note, Jefferies said while the subsidy is not material considering the cost of a base station is CNY200,000 to CNY300,000, “this is a strong indication that the government realises 5G build is a very expensive exercise and may not offer attractive return”.
The city government announced a series of incentives for 5G development to support its aim of offering the best urban coverage: it targets having 45,000 5G base stations by August 2020.
Jefferies said other financial incentives are likely to be offered, suggesting provincial and city governments could step forward with subsidies.
In July, Shanghai detailed plans to cover the entire downtown and main suburban areas by the year-end with 10,000 5G base stations. The municipal government’s ambitious plan is to deliver blanket 5G coverage by 2020.
A week later, Guangzhou announced plans to accelerate 5G rollout, targeting full coverage with 65,000 base stations by 2021.
The city’s Bureau of Industry and Information Technology aims to deploy 14,600 5G base stations by end-2019, and had 5,000 sites in operation at the time of its announcement.Subscribe to our daily newsletter Back