Market Trends of China Telecom Towers Industry
5G Deployments are a Major Catalyst for Growth in the Cell Tower Leasing Environment
- China commands a significant share of the studied market, consistently leading in tech advancements such as 5G, interconnected devices, and smartphone penetration. The GSMA forecasts that by 2025, China is expected to reach 1,458 million smartphone connections, outpacing many industrialized nations.
- Due to China's leadership in tech adoptions like 5G and smartphone usage, the country is expected to secure a substantial share of the industry.
- Driven by concerted efforts from the Chinese government, telecom operators, and suppliers, there's a notable uptick in investments and collaborations, all aimed at accelerating 5G implementation. Mobile network operators (MNOs) are poised to make substantial infrastructure investments to expand 5G capabilities, with rooftop infrastructure being pivotal.
- Rooftops and building facades offer prime real estate for MNOs aiming to densify their networks and broaden their coverage. In urban settings, antennas positioned on rooftops can transmit 5G signals directly to customers, leveraging a clearer line of sight. This positioning ensures reliable 5G reception for individuals and devices on the ground, even near the edges of adjacent buildings.
- As MNOs enhance their 5G capabilities, rooftops emerge as crucial assets. For instance, as reported by cww.net.cn, the surge in 5G adoption is evident: by May 2024, China Mobile boasted 503 million 5G users, while China Telecom recorded 334 million. This marks a significant uptick from the previous year, positioning 5G as the dominant network technology in the near future.
- In 2023, according to the Ministry of Industry and Information Technology (MIIT), China had established 3.38 million 5G base stations nationwide. The nation also launched over 10,000 5G-driven industrial internet projects and initiated 5G pilot applications in pivotal sectors like cultural tourism, healthcare, and education. These efforts were aimed at rejuvenating and amplifying consumption. Additionally, 5G mobile phone users in China surged to 805 million by the end of 2023, highlighted by MIIT's vice minister, Xin Guobin.
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The Renewables Segment is Expected to Witness Growth
- Amid rising liquid fuel and operational costs, telecom tower companies in China are increasingly turning to renewable energy sources. By adopting green technologies, these companies stand to reduce their operational expenses significantly.
- Telecom towers are leveraging hybrid energy systems that integrate renewable technologies, including solar photovoltaic panels, wind turbines, fuel cells, and microturbines. This shift curtails fossil fuel consumption and plays a pivotal role in reducing carbon emissions.
- Due to the telecommunications sector's growing demand for sustainable energy solutions, the renewable energy segment is poised for rapid growth in the Chinese telecom tower market during the forecast period. Telecommunications, as a vital support service, underpins the swift development and modernization of numerous economic sectors.
- To combat electricity supply shortages, telecom providers have traditionally relied on diesel generators. However, while diesel power addresses immediate needs, it also incurs fluctuating operational costs and contributes to greenhouse gas emissions. The shift toward renewable energy promises to curtail diesel consumption and offers the potential to reduce or even eliminate the operational hours of diesel generators, further propelling revenue growth in this segment.
- The combination of renewable energy in telecom networks is the right path forward. However, completing sustainability goals requires a high level of collaboration among operators, infrastructure vendors, and suppliers and adopting new business models. Innovations in the energy market and collaboration between the government and the private sector are essential to accelerate the transition to clean energy.
- The move toward net zero will also depend significantly on technological advancements and the integration of sustainability into business practices. Hence, to curb these emissions, the telcos have been gradually shifting toward adopting renewable energy, which generates substantial cost savings, thereby enabling the profitable expansion of mobile networks to rural and low-population-density areas.
