Why does the price of the same broadband differ by twice as much?
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Nearly four months after the Beijing Municipal Housing and Urban-Rural Development Commission and other three departments issued the "Notice on Promoting the Implementation of Broadband Access in Property Management Residential Communities" in June, the chaos of broadband in residential communities still exists. The reporter found that the annual fees of different broadband companies with the same bandwidth differ by more than 500 yuan. The price of the same broadband company in two residential communities facing the street differs by twice. The three major inducements for the market price chaos are the monopoly of operators in residential communities, the different construction costs of state-owned enterprises and private enterprises, and the price wars of latecomers. On-site report: The annual fee of the same speed is half the difference Domestic broadband providers are divided into state-owned enterprises and private enterprises. State-owned enterprises include China Mobile, China Unicom, China Telecom and Gehua Cable, and private enterprises are countless. The larger and more famous ones include Great Wall Broadband, Founder Broadband, Broadband Pass, etc. The reporter found through investigation that in Beijing, although broadband providers provide broadband with speeds of 10M, 20M, 50M, 100M, etc., there are significant price differences between merchants and between communities. Through the broadband providers' official websites and the information obtained from the investigation, the reporter compared the prices of 100M and 50M broadband. Taking the use time of one year and the speed of 100M as the unified standard, the price of China Telecom broadband in Beijing is 1510 yuan, China Unicom is 1780 yuan, Founder is 1480 yuan, Broadband and Great Wall Broadband are both 1280 yuan, China Mobile Broadband and Gehua Broadband have not launched 100M packages, only 110M, and the price is also 1280 yuan. From the perspective of one-time expenditure, the difference between the highest price and the lowest price is 500 yuan, but each operator will also give away some gifts when handling broadband packages. For example, Gehua Broadband and Founder Broadband are currently implementing a buy one year get one year free campaign. If converted into one year, the tariff is 990 yuan and 940 yuan respectively, and they will also give away network boxes, TV set-top boxes, etc. China Telecom will give away 3 months after one year. The same is true for one year of use, and with 50M as the unified standard, the price of China Telecom Huayi Broadband in Beijing is 980 yuan, China Unicom Broadband is 1480 yuan, Founder Broadband is 960 yuan, and China Mobile's price is 1080 yuan. Some broadband providers do not have 50M services. The price of Gehua 55M broadband for one year is 1080 yuan, and the prices of Great Wall Broadband and Broadbandtong 70M broadband are also 1080 yuan. Although the broadband speed is low, it can be seen that there is a difference of 520 yuan between the highest and lowest prices of 50M broadband. Of course, this is only compared based on the one-time expenditure for one year. If the one-time expenditure is for two years, China Mobile's 50M broadband costs only 800 yuan a year, and 100M broadband costs only 900 yuan a year, which is lower than the price of private broadband. In addition, the reporter visited several communities and found that even in Beijing, the prices of the same broadband provider in different communities are different. Some communities are indeed calculated according to the standard price on the official website, and there are also some communities with prices higher or lower than the official website prices. In a residential area outside the East Fifth Ring Road, the property staff gave the reporter a China Telecom leaflet showing that the price of 50M Telecom broadband is 906 yuan/year, and the price of 100M is 966 yuan/year. According to the one-time expenditure for two years, 50M broadband only costs 816 yuan per year, and 100M broadband needs 876 yuan/year, which is much lower than the price on the official website. Mr. Zhang, who lives in a residential area in Chaoyang District, told reporters that after the residential area was delivered last year, he started to renovate the house. When installing broadband, he chose a service that cost 1,610 yuan per year, which is twice the price of the same service broadband of the same operator in another residential area across the road. If the price gap between merchants in the same city is large, then the price gap between the same broadband merchant between regions and cities can be described as doubling. Shaanxi Unicom charges users 1,280 yuan per year for 20M broadband, while in a county in Shanxi Province, 20M broadband only costs 400 yuan per year, and IPTV services and TV boxes are given away. Reason 1: Broadband monopoly leads to price chaos Monopoly shady Regarding the various broadband price chaos issues, Kang Zhao, editor-in-chief of Operator World Network, told reporters that the different broadband prices are related to the construction and leasing costs of broadband, market competition, and broadband business models, and the relevant departments have not regulated and regulated broadband prices. However, it is worth noting that the long-standing monopoly of community broadband is an important reason for indirectly pushing prices to a high level. It is understood that the phenomenon of community broadband monopoly has existed for many years, and consumers often have no choice but to pay high prices for it, no matter how high the prices of these broadbands are. Ma Jihua, a telecommunications industry expert, said that this phenomenon of monopoly operation is mainly in newly built residential communities and some university campuses. "There are two main reasons for the problem. One is that the operators are unwilling to lose the broadband operating rights of any community due to the pressure of KPI assessment. On the other hand, the real estate industry is now a hot industry, and developers or property companies that control the resources of owners are in a strong position. In the case of competition among multiple operators, property companies are prone to the phenomenon of "the highest bidder wins and reaps the benefits". In other words, price monopoly is related to both developers and property companies." In this regard, the reporter contacted the relevant person in charge of China Telecom, who pointed out that the broadband access of most communities is contacted and communicated by operators and property companies, and operators cannot negotiate with owners. If there is no permission from the property company, broadband cannot enter the community. The key factor that determines whether broadband providers can enter the community is the entry fee. "In some communities, the property company is blocking us from paying us. Some prices are reasonable, while others are sky-high. If this one does not pay, it will ask another one. Whoever pays will be allowed to enter, and those who do not pay will not be allowed to enter. Some of this phenomenon is caused by the exclusivity caused by competition among operators; some old communities are managed by the municipal government, and it is difficult for operators to coordinate, resulting in difficulty in broadband access." An insider of an operator revealed to the reporter. Xiang Ligang, a senior communications expert, said frankly that the entrance fee can be as high as 20% of the broadband price. Regarding the developer level, an unnamed real estate industry insider said frankly that the monopoly of broadband in some residential communities has actually planted the seeds of disaster from the beginning. "Sometimes, in order to save construction costs, real estate developers do not build weak current pipe wells and other communication supporting facilities when building communities. They will sign a contract with a telecommunications company to let the company invest in the construction, and then lock the pipe wells to prohibit other operators from using them. According to the principle of who builds, who benefits, only the telecommunications company that lays the wiring will be allowed to move in after the community is built." Another person in charge of a real estate developer told reporters that they would conduct bidding through the procurement department, because some areas have several operators, and they will compare prices. If there is only one operator in some areas, they can only negotiate directly. The person in charge of a network technology company specializing in the installation of community broadband equipment revealed that the monopoly of community broadband operations is difficult to eradicate. Behind it is a profiteering industry chain: broadband operators exclusively operate a community with a scale of about 1,000 households, and the initial investment requires 50,000 to 80,000 yuan, and the investment cost can be recovered in 3 months, with a gross profit of nearly 500,000 yuan a year. Repeatedly banned In fact, the governance of community broadband monopoly started very early. In 2012, the Beijing Municipal Commission of Economics and Information Technology, the Beijing Municipal Commission of Housing and Urban-Rural Development, and the Beijing Municipal Communications Administration jointly held a pilot meeting for the Beijing Fiber Broadband Popularization and Speed-up Project, clearly pointing out that relevant property management units should actively assist, requiring relevant property management units not to artificially set up obstacles or charge fees, not to sign monopoly agreements with enterprises on access and use of information infrastructure such as communication pipelines within the building red line, not to restrict the access and use of telecommunications operators in any way, and not to restrict the right of users to freely choose telecommunications services. In June this year, the Beijing Municipal Commission of Housing and Urban-Rural Development, the Communications Administration, and the Economic and Information Commission jointly issued the "Notice on Promoting the Implementation of Broadband Access in Property Management Residential Communities", stipulating that real estate developers or property service companies shall not sign monopoly or exclusive broadband operation agreements with others. On the premise that the equipment room and other infrastructure have multiple access, property service companies should try their best to meet the needs of owners, ensure equal access for at least three broadband operators, and disclose the relevant information of broadband access to owners in prominent locations in the community. However, despite the continuous issuance of various notices and requirements, the phenomenon of broadband monopoly in the community has been repeatedly banned. Xiang Ligang said that the relevant departments have issued documents repeatedly, but the governance effect has not improved much. Just one notice does not have much deterrent effect. Only real verification and management can change the monopoly phenomenon. At present, there is still a long way to go before the system is formed. "For example, the urban construction administrative department and the housing administrative department will record bad behaviors in the enterprise credit information system for public exposure. Then how to choose the exposure platform, how to ensure the effect, what exactly "serious circumstances" means, and how much the fine is, should be further refined." Telecom analyst Fu Liang pointed out that if there is only one broadband company in the community, the repurchase and rental prices of the property company should also be refined. Reason 2 Construction costs far exceed rental fees Infrastructure costs are another important reason for the current large gap in broadband prices. According to the broadband price data compiled by reporters, based on the unified standard of one year of use and 100M speed, the price of China Telecom broadband in Beijing is 1,510 yuan, China Unicom is 1,780 yuan, Founder is 1,480 yuan, Broadband and Great Wall Broadband are both 1,280 yuan, and the package price of Mobile Broadband and Gehua Broadband 110M is 1,280 yuan. Kang Zhao, editor-in-chief of Operator World Network, pointed out that this is related to the most basic broadband investment costs. China Unicom and China Telecom both have their own backbone networks, and the construction costs may be more than hundreds of billions of yuan. Private broadband generally does not have its own backbone network, and needs to rent the networks of Unicom and Telecom to develop users. The rental fee is much lower than the construction fee. Take China Unicom as an example. In 2015, the company's fixed-line broadband main business revenue increased by 6% year-on-year to 53.96 billion yuan; the number of fixed-line broadband users increased by 5.1% year-on-year to 72.33 million households. China Unicom's 2015 financial report shows that with the expansion of network scale and the increase in energy, property rental and other cost investments, the company's network operation and support costs in 2015 were 42.31 billion yuan; broadband and data expenditures were 33.76 billion yuan, accounting for 25.2% of total capital expenditures, and infrastructure and transmission network capital expenditures were 31.16 billion yuan, accounting for 23.3% of total capital expenditures. Private broadband network cost expenditures are relatively small. Take Great Wall Broadband as an example. Great Wall Broadband is just an ISP (Internet Service Provider), and all circuits are leased telecommunications circuits. According to the 2015 financial report of Great Wall Broadband's parent company Dr. Peng, the company expects that one of the key capital expenditures in 2016 will be network coverage and data center and cloud platform construction, with an estimated investment of 4 billion yuan. There is a big difference between tens of billions and hundreds of billions, and then there will naturally be price differences at the product level. However, it can also be seen that the difference in cost investment between state-owned enterprises and private enterprises in network construction and leasing is not proportional to the changes in their broadband prices. Broadband prices are obviously not as different as cost investment, because "last year, relevant departments repeatedly called for speed increase and fee reduction. The current broadband prices of China Unicom and China Telecom have been significantly reduced. Therefore, despite the high construction costs, China Unicom and China Telecom have to reduce fees." Industry observer Hong Shibin said. It is reported that due to the high cost of broadband construction, Google's parent company Alphabet is considering readjusting its high-speed broadband business. People familiar with the matter said that the company plans to use wireless technology instead of optical cables to provide high-speed broadband services in more than a dozen cities including Los Angeles, Chicago and Dallas. In addition to the inherent cost factors, Hong Shibin believes that the low prices of some private broadbands are also related to their opportunistic business models. Communications expert Xiang Ligang also introduced that some private broadband operators will rent a network with a larger bandwidth, and then divide it into multiple branch networks to the maximum extent and rent it to customers. Take 100M bandwidth as an example. According to the wholesale distribution of 1M per household, it can serve 100 users. According to China Unicom's tariff in Beijing, 100M broadband costs 1,980 yuan/year. If it is distributed to 100 users, the tariff for each broadband is about 100 yuan per month, which means a huge profit of more than 100,000 yuan in a year. "In order to ensure that they can obtain more profits, some private broadband operators guarantee profits by the number of users. As the number of users continues to increase, the network speed will be more affected. The 10M broadband that many users apply for does not mean exclusive use of 10M, but that the broadband can reach up to 10M. Therefore, the claim of exclusive broadband is deceptive." Xiang Ligang said frankly. Reason 3: Latecomers enter the market at low prices Among the three major basic operators, China Mobile is a bit different, with prices much lower than the other two. In the view of industry insiders, on the one hand, it is because China Mobile has not yet built its own backbone network, and on the other hand, it is also a strategy adopted by latecomers to grab the market at low prices. Data shows that based on a unified standard of one year of use and a speed of 100M, the price of China Telecom's broadband in Beijing is 1,510 yuan, China Unicom is 1,780 yuan, and China Mobile's 110M broadband price is 1,280 yuan. China Mobile's broadband price is 230 yuan and 500 yuan lower than the other two, respectively, and it also gives away an Internet TV box and two years of viewing service fees. In addition to the tariff, the preferential activities launched by Beijing Mobile are more attractive to consumers. Earlier, when visiting the mobile business hall, the reporter found that Beijing Mobile launched the "call fee offset network fee, broadband enjoys discount" activity: if the monthly mobile phone consumption reaches 128 yuan, you can enjoy 20M broadband for free; if the monthly consumption reaches 158 yuan, you can enjoy 50M broadband for free; if the monthly consumption reaches 188 yuan, you can enjoy 100M broadband for free. In other words, for people with slightly higher mobile phone consumption, a month's mobile phone bill is equivalent to buying fixed-line broadband, saving this cost. Kang Zhao said that China Mobile only obtained the license for fixed-line broadband business in the past two years. This year, the company listed the market share of household broadband as an important operating assessment indicator for local branches. Therefore, each branch will use low prices to grab the market, and it seems that this trick is very successful at present. The operating data of the three major operators in August showed that China Mobile had a net increase of 2.594 million fixed-line broadband users, with a total of 71.167 million; China Unicom had a net increase of 249,000 fixed-line broadband users, with a total of 74.473 million; China Telecom had an additional 710,000 users, with a total of 119.52 million people. It is understood that in the past, due to its large market share, China Mobile was subject to asymmetric regulation. In order to balance the market structure, the Ministry of Industry and Information Technology issued the "Notice on Further Implementing the Spirit of the Documents on Regulating the Order of the Telecommunications Market" in 2009. The document clearly stated that China Mobile can only operate wireless broadband access services using the TD-SCDMA network, and the wired broadband business is authorized to be operated by China Tietong. Although China Mobile has always been a giant in the mobile communications market, it has been a dwarf in the fixed-line market, especially in the development of fixed-line broadband. It has always lagged behind China Unicom and China Telecom. It was not until December 2013 that the Ministry of Industry and Information Technology issued a document to cancel the restrictions on China Mobile's fixed-line business and allow it to enter the fixed broadband market. In November last year, China Mobile announced that it would acquire China Tietong's fixed-line telecommunications assets, which are wholly owned by its parent company China Mobile Communications Group, for up to 32.88 billion yuan. In Xiang Ligang's view, China Mobile's low-priced broadband and bundled sales are very attractive to consumers. If China Mobile builds a nationwide backbone network, based on more than 800 million mobile broadband users, then China Mobile will be a veritable monopoly in the telecommunications market. Regarding China Radio and Television, which just obtained the "Basic Telecommunications Business Operation License" this year, Hong Shibin predicted that it will most likely adopt a low-price strategy to enter the market like China Mobile, while offering cable TV discounts to attract consumers to join its camp. As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity. |
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