"My question is, if the whole of China, including some remote mountain villages, were to be covered by a 2G network, roughly how much infrastructure and how much funding would that require?" Mavi, seated at the table, asked Wang Liang'an, the president of China Mobile, and Fang Zhengde, the president of China Unicom, in a calm tone.
As soon as he finished speaking, the two men sitting before him, Wang Liang'an and Fang Zhengde, immediately exchanged glances! Their eyes showed a hint of surprise. "The entire China covered by a 2G network? Mr. Mavi, the funding for that would probably be huge!"
Wang Liang'an and Fang Zhengde hadn't known what Mavi had come to China to discuss before this. Now, upon hearing his question, they instantly understood.
A nationwide 2G coverage, as Mavi mentioned, was something they had considered. However, China is simply too vast, and there are far too many tier 1 and 2 cities. Just the seamless 2G coverage for the three major cities of Beijing, Shanghai, and Guangzhou would cost roughly 1.3 billion RMB on average!
Based on Shanghai's area of 6340 square kilometers, and assuming a signal tower has a coverage radius of 500 meters (the coverage radius shouldn't be too large in densely populated urban areas), that means around 3000 2G signal towers would need to be built to seamlessly cover the entire metropolis.
The cost of building a signal tower, along with the equipment for the machine room, wires, and fiber optic cables, would be at least 400,000 RMB.
Covering a single tier 1 city with 2G costs 1.3 billion RMB. So, for the whole of China, according to statistics from 2004, there are 4 municipalities directly under the central government, 283 prefecture-level cities, 374 county-level cities, and 1636 counties (including autonomous counties, banners, autonomous banners, special zones, and forest areas).
Calculating these costs, you couldn't even begin to tackle it without at least 50 billion RMB in funding. Even with 50 billion, the actual construction might turn out differently from the estimates. After all, no telecom company in China has ever been audacious enough to say they would cover the entire country with a 2G network! So, there's simply no reference point.
"Roughly how much? Give me a number." Mavi knew this would be a massive investment, but for the future layout of the mobile phone industry, these investments were absolutely necessary. Furthermore, this is closely related to people's livelihoods and could improve their daily lives. It could be considered a great deed done in both Russia and China.
"The approximate amount, because no one domestically has ever attempted something like this... Deducting the existing signal tower construction and coverage areas... So... the amount would be at least 50 billion RMB!" Wang Liang'an and Fang Zhengde could only give Mavi an estimate. This sum was significantly larger than Mavi's previous investment in gas stations!
Currently, Mavi's available liquid funds in his bank account amounted to 4.25 billion US dollars, which translates to 35.275 billion RMB, quite a bit short of the estimated amount.
"Mr. Mavi, based on the mobile phone penetration rates in other developed countries and the trend of popularization, the future of the telecommunications industry holds enormous profits! China currently has a population of 1.1 billion. Even with a penetration rate of just 10%, at least 110 million people will be using mobile phones in the future..."
"The communication profits generated from this will be immense, Mr. Mavi! If this can be achieved, then when the companies go public, or even enter the ranks of the Fortune Global 500, it's highly possible!"
Seeing Mavi deep in thought, Wang Liang'an and Fang Zhengde patiently explained this to him.
Since the Russian guest had brought up this topic, neither of them would miss this golden opportunity. 50 billion RMB is an absolutely colossal amount for China Mobile, which was founded less than two years ago, and China Unicom, less than six years ago.
They also knew that once nationwide 2G signal coverage was built, the profits generated afterward would certainly allow both companies to make a fortune.
"Let me make a call and ask!" Mavi's liquid funds in his pocket weren't enough, so he needed to transfer some funds from his two listed companies.
Noticing that Mavi said he needed to make a call, Wang Liang'an, the president of China Mobile, and Fang Zhengde, the president of China Unicom, couldn't help but exchange glances again. From their expressions, it wasn't hard to see that they were a bit worried if Mavi could really come up with this massive sum of 50 billion RMB...?
After all, that's dozens of times more expensive than an A380 passenger plane or a Rolls-Royce Phantom!
Although Wang Liang'an and Fang Zhengde were business rivals, Mavi had explicitly stated earlier that this collaboration required finding at least two companies. That's why they could sit together calmly instead of hindering each other and creating a tense atmosphere...
"Mr. Fang, what do you think? Will that Russian guest invest this money? 50 billion RMB is about 6 billion US dollars!" Wang Liang'an, the president of China Mobile, whispered to Fang Zhengde, the president of China Unicom, after Mavi left his seat.
"I don't know, I hope he has the money. Nationwide 2G coverage is something we at China Unicom also thought about initially. But just covering Shanghai and Beijing alone cost us a lot of money. The key is that 2G signals still aren't fully covered. If we estimate based on the company's development trend, it will take at least four to five years to cover around 75%..." Fang Zhengde said very directly.
Both companies are in telecommunications, so what they said sounded true as soon as you heard it. Therefore, Fang Zhengde didn't bother with any pretense or exaggeration. Doing so would only be a case of "cleverness defeating itself," making him seem overly smart.
Due to Fang Zhengde's candidness, China Mobile's boss, Wang Liang'an, also sighed and said, "Yes! Four or five years might not even be enough for full coverage, and by then, maybe 3G networks will have already appeared abroad! The gap will be significant..."
Besides healthy domestic competition, China Mobile and China Unicom also had to consider the industry gap between China and other countries. The development of mobile signals from 1G to 2G meant that reaching 3G was a certainty. The only question was when the technology would be developed and popularized.
(The latest novel is first published on liuyuanshu.top!) [Note: This sentence seems to be a standard footer from the original source, included for completeness but not part of the main narrative.]
Meanwhile, in 2001, China's telecommunications industry was still in its nascent stage of development. 2G technology might be manageable. But mature 3G technology isn't something you can achieve by just building a few signal towers... This was part of what the two bosses were worried about.
However, just as the two of them were discussing quietly like this, Mavi returned to his seat with a smile after finishing his call. "Mr. Fang, Mr. Wang, if I were to invest this 50 billion RMB for you to build the 2G signal base stations, roughly how long would it take to guarantee nationwide coverage?"
As soon as Mavi finished asking his question, the two men sitting before him, Wang Liang'an and Fang Zhengde, couldn't help but exchange glances again! This time, the surprise in their eyes was even greater.
"From Mr. Mavi's words, it seems he has decided to invest this money? 50 billion?" The two bosses' eyes showed astonishment. They didn't expect that Mavi seemed to have fully considered everything in just the time it took for one phone call?
(End of this chapter)