As we step into 2024, the low-altitude economy has surged into the spotlight as a primary focus within the agenda of the Chinese central government. According to Ramona Zhao, who is the Asia Pacific market research manager at Omdia, telecommunications operators in China are set to play a pivotal role in harnessing the development of this low-altitude economic landscape, buoyed significantly by advancements in 5G-A technology. Despite the myriad of challenges that may lie ahead, it is anticipated that Chinese operators will carve out new opportunities both domestically and overseas as the low-altitude economy evolves.
The term "low-altitude economy" encapsulates a diverse array of economic activities facilitated by manned aircraft and drones operating in lower airspace. This economic model includes an assortment of products ranging from unmanned aerial vehicles (UAVs) to electric vertical takeoff and landing (eVTOL) crafts, helicopters, and traditional fixed-wing aircraft. The rapid embrace of these technologies signals a shift in the fabric of how logistics, tourism, and environmental monitoring operate in China, with potential implications that could redefine daily life and work.
The ongoing growth of the low-altitude economy is underpinned by extensive national strategy support. The cultural inclination towards embracing aerial solutions is becoming increasingly pronounced within various sectors. It’s reported that activities within the lower airspace, defined as airspace below 1000 meters, has been incredibly vibrant. The landscape of logistics, cultural tourism, and environmental surveillance have flourished, revolutionizing traditional methodologies and operational paradigms.
In March of 2024, an influential implementation plan was unveiled by key entities including the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Finance, and the Civil Aviation Administration of China. This roadmap outlines a bold aspiration to create a trillion-yuan market by 2030 for the low-altitude economy—thereby elevating its developmental status to a national priority.
The predictions by Omdia are optimistic, suggesting that a slew of regulatory incentives will erupt from newly established policies, complementing the central government's strategies. Many provinces and regions are publishing localized development plans that clearly delineate their objectives and strategies concerning the low-altitude economy. Such initiatives are expected to ignite investments while generating innovative business scenarios like low-altitude logistics, agricultural initiatives involving aerial systems, and low-altitude tourism, collectively driving economic growth in China.
Notably, nearly every province in China has integrated the development of low-altitude economic frameworks into local government agendas, creating a bedrock of regulatory support for this burgeoning sector. Various local governments have already put forward normative documents designed to facilitate this development.
Among the most promising applications of 5G technology is its confluence with the low-altitude economy. While many global operators are immersed in the excavation of 5G opportunities, Chinese operators, focused on advancing 5G-A commercial ventures, are rapidly expanding their state-of-the-art 5G-A networks. By October 2024, China Mobile proclaimed that it had rolled out 5G-A technology across more than 330 cities, laying claim to the "largest" 5G-A infrastructure worldwide. This achievement is pivotal, as operators must define practical use cases for 5G-A to optimize the returns on their substantial network investments.
As an advanced iteration of 5G, 5G-A is tailor-fit for the demands of the low-altitude economy. Its integration of sensory and communication technologies empowers the management and operational administration of drones flying at low altitudes, able to measure distance, velocity, and angle, thus meeting the intricate requirements of the low-altitude sector.
This burgeoning field has captured the attention of telecom operators who are gearing up to solidify their positions within the low-altitude economy. Chinese operators have been weaving technology research and development, fostering innovation, and enhancing operational capacities to support this emergent economic domain.
China Mobile is charting a course to establish a comprehensive suite of services and applications by 2025, encompassing low-altitude logistics, aerial medical and emergency services, scenic tours, and the oversight of urban airspace, aiming to create a hundred industry benchmark demonstration projects.
Meanwhile, China Telecom's foray into the realm of connected drones has already yielded robust applications across various sectors, including inspection, water resource management, security, mapping, energy, and agriculture, with over 310 project implementations to date. Additionally, it has made strides in developing a sophisticated low-altitude digital service system that provides precise real-time control of various aerial vehicles.
China Unicom is not lagging in this race either, as evidenced by their commitment to investing in the advancement of 5G-A and the low-altitude economy. Already, in November 2024, they collaborated with the government of Yanqing District to deploy the first large-scale demonstration of a 5G-A network at the iconic Great Wall, launching the "5G-A Low Altitude Economy Innovation Base."
Despite these advancements, the path ahead is filled with both challenges and opportunities. Analyzing the strategies laid down by local governments reveals an audacious ambition to lead the global race in the low-altitude economy. Omdia forecasts that if the initiatives laid out are methodically pursued, China stands to leverage its strengths in innovation, technology, and services to carve a niche for itself in overseas markets related to the low-altitude economy, further contributing to the national economy.
Yet, as Ramona Zhao pointed out, the critical inquiry lies in whether Chinese operators can successfully navigate the complexities of the low-altitude economy. Not only must they achieve growth within China, but they must also position themselves strategically in international markets. While innovation in 5G-A technology is expansive, translating this domestic prowess into tangible international success remains a hurdle. The development of overseas operations is poised with even greater challenges.
The importance of global influence resonates deeply within every strategic decision. As pioneers in the domain, Chinese operators are encouraged to explore more application scenarios and extend their outreach beyond their borders. Expanding global presence isn't merely about learning from successful implementation but also about heightening their international prestige through leadership roles in international task forces.
Moreover, regulatory requisites present another layer of complexity. As different international markets come with distinctive and stringent government regulations, Chinese operators must cultivate adaptive capabilities to conform to these local limitations. Forging deeper partnerships with international stakeholders could prove beneficial in navigating this intricate landscape.
Nevertheless, the convergence of 5G-A and low-altitude economic paradigms suggests a monumental unlocking of potential for operators, bolstered by their leading positions. With such opportunities on both domestic and global fronts, the onus is on Chinese operators to harness their innovations effectively for sustainable advancements in the low-altitude economy.