China Mobile's terminal marketing will only invest in 4G next year and cancel 2G/3G subsidies

One million 4G base stations, 250 million 4G users, and 200 million new 4G terminals are the goals set by China Mobile for the coming year 2015. In order to meet this goal, at the China Mobile Global Partner Conference that just concluded last week, China Mobile made it clear that in 2015, all marketing resources and subsidies for terminals will be invested in 4G terminals, and no more subsidies will be provided for 2G and 3G terminals.

According to data from China Mobile's survey, the overall domestic terminal market size is expected to reach 420 million units in 2014, and China Mobile's 3G and 4G combined market share is expected to reach 57% by the end of the year. Among them, 4G mobile phones will exceed 100 million units, with 1,000 yuan smartphones accounting for 65%, and prices dropping to 299 yuan.

In 2015, China Mobile predicts that the domestic 3G terminal market will drop by 75%, and the scale of 4G terminals will quadruple to 290 million units, of which China Mobile's goal is to achieve 200 million units.

Gao Nianshu, general manager of China Mobile's marketing department, said that in order to ensure the full implementation of the marketing strategy, China Mobile will invest all its terminal marketing resources in 4G terminal sales in 2015, pay more attention to the scale of terminal customers and the customer value brought by the terminals, and further optimize terminal remuneration and subsidies.

To this end, China Mobile has formulated six major sales measures, including signing strategic cooperation agreements, product-exclusive marketing services, old-for-new platforms to promote phone replacements, joint marketing of traffic trading platforms, integrated system capability solutions, and financial service solutions in conjunction with financial institutions, to provide partners with more support and services.

It is understood that China Mobile has signed a strategic cooperation letter of intent with 30 terminal and channel sales partners. Due to the different types of partners, China Mobile's subsidies and support for each are also different. For example, higher subsidies will be given to terminal manufacturers, especially those that can meet the requirements of converged communication terminals, CA terminals, and five-mode thirteen-frequency terminals; for channel dealers, China Mobile will sign 4G packages with them, and there will be different incentives when they reach a certain level.

It is worth mentioning that in addition to traditional terminal and channel vendors, well-known e-commerce websites such as JD.com, Tmall, No.1 Store, and Dangdang.com have also joined China Mobile’s terminal sales. China Mobile said it would provide unified system access, card allocation, and settlement for them. In addition to enjoying channel policies, additional incentives will also be given when a certain volume is reached.

However, China Mobile did not disclose the total amount and proportion of the above subsidies and incentives. It is just that the remuneration standard for traffic marketing partners will be greatly increased, and the subsidy for customized terminals or call charges will reach 35%; and this time China Mobile has provided channel dealers with new remuneration settlement financial plans and channel sales and purchase financial plans. Specifically: the new remuneration settlement financial plan is that financial institutions can give channels a certain proportion (up to 80%) of loan quotas based on the channel sales volume of the channel dealer since T+2 months, the remuneration amount of the first month, and the settlement cycle. The interest fee can be as low as a daily interest rate of 0.03% (annual interest rate of 10.8%). The settlement remuneration is used first to repay the credit amount, and then settled to the channel after repayment; the channel sales and purchase financial plan is to give channels a certain loan quota based on the channel cooperation history, use the loan funds for terminal procurement and offline sales, and the operator's repayments are used first to repay the credit amount, and then settled to the channel after repayment.

It is understood that China Mobile's mobile phone subsidies in 2013 were 26.3 billion yuan, an increase of 11% over 2012. In March this year, China Mobile also said that because 2014 is the first year of 4G development, it will increase mobile phone subsidies and plan to increase mobile phone subsidies to 34 billion yuan, an increase of about 30% over last year. However, due to policy reasons, China Mobile was soon forced to cut marketing expenses, that is, cut capital expenditures, especially reduce terminal subsidies.

According to an insider of China Mobile, "In 2015, China Mobile's 4G terminal subsidies will be linked to customer value, rather than directly to terminal sales, so the subsidy intensity will be reduced, but more focused."

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.