What types of fiber transceivers will be involved in 5G era?
2019-09-19
In 2019, the global era of 5G mobile communication is getting closer and closer. Governments of various countries regard the construction and application development of 5G as an important national goal. Direct and indirect output driven by 5G will reach 6.3 trillion RMB and 10.6 trillion RMB respectively in 2030, according to the white paper on 5G's economic and social impact by the China academy of information technology. In terms of direct output, starting from the official commercial use of 5G in 2020, it is estimated that 5G will drive about 484 billion RMB of direct output in that year, and increase to 3.3 trillion RMB in 2025 and 6.3 trillion RMB in 2030, respectively, with an average annual compound growth rate of 29% in the decade. In terms of indirect output, 5G will drive 1.2 trillion RMB, 6.3 trillion RMB and 10.6 trillion RMB respectively in 2020, 2025 and 2030, with an annual compound growth rate of 24%.
From the perspective of industrial structure, the driving force of output growth is transformed with the deepening of 5G commercial process .In the early stage of 5G commercial development, operators carry out large-scale network construction, and equipment manufacturers' income from investment in 5G network equipment will become the main source of 5G's direct economic output. It is estimated that in 2020, the revenue of network equipment and terminal equipment will be about 450 billion RMB, accounting for 94% of the total direct economic output. In the medium term of 5G commercial development, the expenditure on terminal equipment and telecommunication services from users and other industries continues to grow. It is estimated that by 2025, the expenditure on the above two items will be 1.4 trillion RMB and 0.7 trillion RMB respectively, accounting for 64% of the total direct economic output. In the middle and later stage of 5G commercial, the revenue of 5g-related information service of Internet enterprises has increased significantly and become the main source of direct output. It is estimated that the revenue of Internet information service will reach 2.6 trillion RMB in 2030, accounting for 42% of the total direct economic output.
Currently, 5G is at a critical stage of forming technical standards. Major countries and operators around the world have launched 5G tests one after another, and issued strategic plans to carry out industrial layout and seize strategic commanding heights. China is also actively promoting research and industrialization of 5G technology, and new progress has been made in r&d and testing of 5G technology and support of international standardization. Recently, the news that the total expenditure of the three major operators on 5G infrastructure will reach $180 billion within 7 years has pushed the topic of 5G to an unprecedented peak. As we all know, the future of 5G depends on small base stations. When the coverage of base stations becomes smaller and smaller, the number of base stations will increase exponentially. If the planning to 6GHz above, the number of base stations will be more, if the planning to 26GHz above, that do not know how many times! "It is reported that the number of base stations in China has reached more than 5 million, and the conservative forecast of the future development of 5G will reach more than 10 million, or even more if the frequency is high.
First, fiber optic is the first beneficiary.5G May have 2-3 times the number of base stations in the frequency band, and the Fiber Broadband Association estimates that 5G will use 16 times more Fiber than 4G if full coverage is required. Considering that the density of 4G base stations in China is very high, and the urban space is only several hundred meters apart, it is estimated that the consumption of 5G fiber is 2-3 times that of 4G.Second, light modules are the second beneficiaries. Assume that 5G base station is 2-3 times of 4G, and then consider the medium/return module, which is expected to bring tens of millions of levels of 25GHz high-speed optical module consumption. The flat architecture of 5G brings huge capacity and cost pressure to the tradition, which requires a large number of optical modules to support. Furthermore, high-speed optical access network systems and optical devices are the third beneficiaries.5G architecture makes the back/middle/front transmission capacity expand by dozens of times, up to hundreds of Gbps level. It is necessary to introduce CWDM or WDM based on 25G/50G, which puts forward high cost performance requirements for adjustable laser, adjustable filter and CWDM/WDM devices .For TWDM PON system, the demand of eCPRI and even edge ROADM system may increase greatly. With the implementation of 5G current network scale pilot and the acceleration of pre-commercial process, 5G bearing technical solutions will continue to strengthen integration and innovation. The role of optical module in data center cannot be ignored, especially in today when data center has higher and higher bandwidth requirements. Optical module has even restricted the development of data center to some extent. Therefore, it is hoped that more and more enterprises will join the optical module market and promote the faster development of optical module market. It is no exaggeration to say that a small size makes a big difference when describing the role of optical modules in data centers. In short, we believe that there is still a market demand for optical fiber and cable. Whether it is the capacity expansion of transmission network driven by 5G in the future, or the optical fiber entering households and enterprises with room for growth, the connectivity business brought by cloud services in the future may be larger than we think. However, the growth rate of this demand will surely slow down at some time in the future, which is determined by diminishing marginal utility in economic development. We should not hype the concept with huge expectations for the growth of fiber demand, nor should we form a pessimistic view of the industry just because of the temporary delay of procurement or the slowdown of 5G commercial. Obviously, the current market is not optimistic about the future of optical fiber.
From the perspective of industrial structure, the driving force of output growth is transformed with the deepening of 5G commercial process .In the early stage of 5G commercial development, operators carry out large-scale network construction, and equipment manufacturers' income from investment in 5G network equipment will become the main source of 5G's direct economic output. It is estimated that in 2020, the revenue of network equipment and terminal equipment will be about 450 billion RMB, accounting for 94% of the total direct economic output. In the medium term of 5G commercial development, the expenditure on terminal equipment and telecommunication services from users and other industries continues to grow. It is estimated that by 2025, the expenditure on the above two items will be 1.4 trillion RMB and 0.7 trillion RMB respectively, accounting for 64% of the total direct economic output. In the middle and later stage of 5G commercial, the revenue of 5g-related information service of Internet enterprises has increased significantly and become the main source of direct output. It is estimated that the revenue of Internet information service will reach 2.6 trillion RMB in 2030, accounting for 42% of the total direct economic output.
Currently, 5G is at a critical stage of forming technical standards. Major countries and operators around the world have launched 5G tests one after another, and issued strategic plans to carry out industrial layout and seize strategic commanding heights. China is also actively promoting research and industrialization of 5G technology, and new progress has been made in r&d and testing of 5G technology and support of international standardization. Recently, the news that the total expenditure of the three major operators on 5G infrastructure will reach $180 billion within 7 years has pushed the topic of 5G to an unprecedented peak. As we all know, the future of 5G depends on small base stations. When the coverage of base stations becomes smaller and smaller, the number of base stations will increase exponentially. If the planning to 6GHz above, the number of base stations will be more, if the planning to 26GHz above, that do not know how many times! "It is reported that the number of base stations in China has reached more than 5 million, and the conservative forecast of the future development of 5G will reach more than 10 million, or even more if the frequency is high.
First, fiber optic is the first beneficiary.5G May have 2-3 times the number of base stations in the frequency band, and the Fiber Broadband Association estimates that 5G will use 16 times more Fiber than 4G if full coverage is required. Considering that the density of 4G base stations in China is very high, and the urban space is only several hundred meters apart, it is estimated that the consumption of 5G fiber is 2-3 times that of 4G.Second, light modules are the second beneficiaries. Assume that 5G base station is 2-3 times of 4G, and then consider the medium/return module, which is expected to bring tens of millions of levels of 25GHz high-speed optical module consumption. The flat architecture of 5G brings huge capacity and cost pressure to the tradition, which requires a large number of optical modules to support. Furthermore, high-speed optical access network systems and optical devices are the third beneficiaries.5G architecture makes the back/middle/front transmission capacity expand by dozens of times, up to hundreds of Gbps level. It is necessary to introduce CWDM or WDM based on 25G/50G, which puts forward high cost performance requirements for adjustable laser, adjustable filter and CWDM/WDM devices .For TWDM PON system, the demand of eCPRI and even edge ROADM system may increase greatly. With the implementation of 5G current network scale pilot and the acceleration of pre-commercial process, 5G bearing technical solutions will continue to strengthen integration and innovation. The role of optical module in data center cannot be ignored, especially in today when data center has higher and higher bandwidth requirements. Optical module has even restricted the development of data center to some extent. Therefore, it is hoped that more and more enterprises will join the optical module market and promote the faster development of optical module market. It is no exaggeration to say that a small size makes a big difference when describing the role of optical modules in data centers. In short, we believe that there is still a market demand for optical fiber and cable. Whether it is the capacity expansion of transmission network driven by 5G in the future, or the optical fiber entering households and enterprises with room for growth, the connectivity business brought by cloud services in the future may be larger than we think. However, the growth rate of this demand will surely slow down at some time in the future, which is determined by diminishing marginal utility in economic development. We should not hype the concept with huge expectations for the growth of fiber demand, nor should we form a pessimistic view of the industry just because of the temporary delay of procurement or the slowdown of 5G commercial. Obviously, the current market is not optimistic about the future of optical fiber.
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