5G base stations are appearing in more and more cities and corners of the world. The coverage of 5G signals is also constantly expanding.
This means that investment in 5G has fully commenced and is continuously increasing. The question of "how much will 5G cost?" has always been a topic of widespread concern. Some say that 5G investment will be 2 to 3 times that of 4G. Others say that the total investment in 5G will reach a staggering 1.5 trillion yuan.
According to the latest "2020 China 5G Economy Report," the total investment in 5G networks in China from 2020 to 2025 is estimated at 0.9 to 1.5 trillion yuan. The largest portion of this investment will be spent on the construction of 5G base stations.
So, as a key component of 5G investment, what exactly constitutes the cost of a 5G base station? And is there any possibility that these costs can be reduced?
Today, I'll be doing a cost analysis of 5G base station construction.
As I've mentioned before, base stations can generally be divided into macro base stations and micro base stations. The large outdoor iron towers are macro base stations. Currently, the 5G base stations being built on a large scale in China are mainly macro base stations.
Let's start with macro base stations.
A typical 5G macro base station currently includes the following components:
The following image shows the components of a 4G macro base station, compared side-by-side:
As can be seen, compared to 4G macro base stations, in the 5G era, the RRU (Remote Radio Unit) and antenna feeder are "merged" into AAU (Active Antenna Unit), which is connected to the BBU (Baseband Processing Unit) via optical fiber. (Note: In true 5G, the BBU becomes DU and CU, as shown in the diagram below. However, current domestic deployments have not yet reached that stage, and BBU + AAU is still the main configuration.)
The difference between 4G base stations and 5G base stations: The cost of a 5G macro base station generally consists of the main equipment, power supporting equipment and facilities, and civil construction.
Equipment like BBU, AAU, and transmission equipment are the main equipment. Components like power supplies, batteries, air conditioning, and monitoring systems are the power support systems. And the server room itself is the civil engineering construction.
Let's look at the main equipment first.
Currently, 5G is still in its early stages, and the prices of 5G main equipment from various equipment vendors are still fluctuating. Moreover, there is a significant difference between the price of purchasing a single device and the price paid by a carrier group (centralized procurement).
For example, currently, a certain equipment vendor's standard configuration (1 BBU + 3 AAU), considering only the hardware price, is quoted to domestic operators at approximately 200,000 RMB (unless otherwise specified, all units are in RMB). However, overseas, the price can reach 300,000 to 400,000 RMB.
The price of AAU as revealed by netizens is about the same.
5G AAU
If you're an individual looking for equipment, they'll quote 800,000 RMB for 1 BBU + 1 AAU. Even non-mainstream manufacturers will quote 300,000 RMB. (Don't ask me how I know; I just asked.)
Therefore, the price difference for the main equipment is quite significant. Let's take the price purchased by domestic operators as an example, which is approximately 200,000 to 250,000 yuan.
A typical BBU (Baseband Unit) includes a baseband board, a main control board, and a power supply module. The baseband board is the most expensive component, accounting for the bulk of the cost (10,000 to 20,000 RMB). The main control board and power supply are relatively inexpensive, costing only a few thousand RMB.
BBU that supports both 4G and 5G
By the way, the price of 4G main equipment is generally 10,000 to 20,000 yuan for BBU, around 10,000 yuan for RRU, and 1,000 to 5,000 yuan for antenna.
Domestic antenna prices are for reference only.
Let's take a look at the cost of the powertrain.
Power supply equipment provides electricity and cooling for base stations, which is a prerequisite for the normal operation of a base station.
The quantity and specifications of the required power supply equipment vary greatly depending on the base station configuration. The table below provides an example of power supply-related equipment and facilities:
An outdoor server rack costs approximately 5,000 yuan. A power supply cabinet typically costs between 5,000 and 10,000 yuan.
Storage batteries provide emergency power to base stations in the event of an unexpected power outage. Ordinary lead-acid batteries cost 1-2 yuan/Ah, while lithium iron phosphate batteries cost 4 yuan or more/Ah. Batteries are available in rack-mount and frame-mount configurations, with specifications ranging from 48V 100Ah to 48V 1000Ah.
The base station building is also equipped with air conditioning, and the price ranges from several thousand to ten thousand yuan.
In addition, there are some lightning protection facilities and equipment, as well as anti-theft monitoring equipment, which are not very expensive, so they will not be listed separately.
The hardware cost for the powertrain is estimated to be between 30,000 and 50,000 yuan.
Next is the cost of civil engineering construction for the station building.
This cost is a bit complicated. Sometimes it's a self-built property, and sometimes it's a rented property. The price varies greatly depending on the location.
You mentioned that renting a server room in a high-end office building in downtown Beijing is obviously much more expensive than in fourth- or fifth-tier cities. In first-tier cities, the rent can sometimes be as high as 50,000 to 60,000 yuan.
As for steel towers, I just introduced them a few days ago. They come in many types, including single-tube towers, angle steel towers, landscape towers, and pedestal towers. The prices vary greatly depending on the type of steel tower.
Classification of communication tower masts: For example, a typical three-tube tower weighs about 8.5 tons and costs about 90,000 yuan.
Based on the information at hand, I have roughly estimated the prices of various types of iron towers, as shown in the table below:
Reference cost for steel tower construction: The price of steel towers fluctuates greatly with the price of steel. The above costs are for reference only.
Civil engineering involves a wide variety of miscellaneous costs, sometimes including geological survey fees, land acquisition and compensation fees, external power supply construction costs, site selection fees, etc. I'm not actually going to do a full project budget today, so I won't go into detail. The table above should give you a general idea. Generally, China Tower Corporation is responsible for the infrastructure work related to data centers. After bearing the costs, China Tower then charges rent to the operators. The rent is usually calculated based on the size of the equipment and the space it occupies. For example, if an AAU (Automatic Anchor Unit) is mounted on a tower, the rent will be calculated based on the number of AAUs and the rooftop space they occupy.
The costs mentioned above are the hardware-related costs and expenses incurred in building a base station. Besides hardware costs, adding software costs (for the main equipment), installation consumables, and other miscellaneous expenses, excluding rent and labor, the cost of building a new 5G macro base station is approximately 300,000 yuan. If rent and labor are included, the average cost is estimated at 400,000 to 500,000 yuan. It's important to note that currently, only a small portion of 5G macro base station construction by operators is entirely new; most involves adding 5G main equipment to existing 2G/3G/4G sites. The costs involved may include the cost of the main equipment, data center upgrades, power supply expansion, and the rent for the new 5G equipment. This cost is far lower than building a new base station. The above refers to macro base stations. Micro base stations are quite different from macro base stations. While the price of a micro base station itself is certainly lower than that of a macro base station, in densely populated urban areas, rent and entry fees are often higher, and indoor construction costs (wiring and installation) are also more expensive.
Currently, 5G network construction in China is mainly based on macro base stations, which is relatively easy. However, as the network expands to deeper coverage and operators begin building micro base stations at a rapid pace, the pressure on operators will increase significantly.
Macro base stations are mainly responsible for wide-area coverage, while micro base stations and indoor distributed arrays are responsible for deep coverage and capacity absorption.
Beyond the construction costs (CAPEX), the more daunting aspect of 5G is the ongoing maintenance and operating costs (OPEX). As I've mentioned before, 5G base stations consume significantly more power than 4G base stations, currently around 3-3.5 kW, roughly two to three times that of 4G. Electricity costs will be the most significant and undeniable threat to operators in the 5G era.
Of course, the government should provide some subsidies for electricity costs. Furthermore, with continuous technological improvements, the power consumption of 5G base stations will significantly decrease, but that's a topic for another time.
If the industry applications of 5G fail to take off, and if operators cannot obtain a return on investment through 5G construction, it will inevitably affect the enthusiasm for subsequent 5G investment and the ultimate success or failure of 5G.
