China Unicom/China Telecom: No FDD license is not a good thing
|
On May 20 this year, China Telecom released its operating data for April. The number of mobile users in that month decreased by 1.03 million again. From January to April this year, the number of mobile users decreased by 3.41 million. Coincidentally, a few days ago, China Unicom also released its data for April. The number of new mobile users in that month was only 895,000, and the number of new mobile users in that month hit a new low since October 2009. Faced with the sharp decline in the number of users, China Telecom once again did not shy away from blaming its competitors for launching LTE and strengthening marketing. Not only that, an article on the Internet titled "China Unicom follows China Telecom in user growth crisis due to lack of FDD license" directly pointed the finger at the lack of FDD license for the imbalance of market competition. The article believes that due to only issuing TD-LTE licenses, which China Mobile needs most, China Unicom and China Telecom have no way to participate in the 4G competition. They can only watch China Mobile users soar while their own growth is weak. While everyone was arguing about this view, Mr. Yang Haifeng published an article titled "The sharp decline in 3G users should not be blinded by the failure to issue FDD licenses", arguing that FDD licenses are not the key to the weak growth of China Telecom and China Unicom. The author believes that "it is obviously too arbitrary to simply think that the sharp decline in the number of China Unicom and China Telecom users is because they have not obtained FDD-LTE licenses", and the reason why China Unicom and my country Telecom have weak growth is to "use this method to persuade the government to issue FDD licenses." There is no doubt that Mr. Yang Haifeng's view is worth discussing. Since the author has put forward several conclusions, it is worth analyzing them one by one and pointing out the shortcomings: First: Is China's demographic dividend really over? According to the author, since the number of mobile users in my country has reached 1.258 billion, close to the domestic population of 1.3 billion, the number of new users is naturally very limited. However, it cannot be denied that since it is very common for a person to have multiple numbers at the same time, the actual number of people using mobile phones may be far lower than the 1.258 billion currently announced. Because of this, although the number of mobile users in my country is approaching the actual population, it is obviously a bit of a generalization to conclude that the demographic dividend has ended based solely on this phenomenon. Since there are still quite a lot of people in China who have not used mobile phones due to various reasons such as economic problems and network coverage, it is more appropriate to say that "the number of mobile users in some parts of my country is saturated and the demographic dividend has ended." Second, how much impact does the "business tax to value-added tax" have? According to the author, the "business tax to value-added tax" is also one of the reasons for the decrease in new users of China Unicom and China Telecom. Unfortunately, this view is not correct. On April 30 this year, the Ministry of Finance and the State Administration of Taxation issued the "Notice on Including the Telecommunications Industry in the Pilot Program of Business Tax to Value-Added Tax", announcing that the telecommunications industry will officially implement the "business tax to value-added tax" from June 1 this year. Since the "business tax to value-added tax" takes effect on June 1, it has almost no impact on operators from January to April this year. Even after the "business tax to value-added tax" plan was announced on April 30, due to many issues such as corporate accounting procedures and IT system transformation, operators will not change their original marketing plans due to the "business tax to value-added tax" in a short period of time. Because of this, the "business tax to value-added tax" is not the reason for the decrease in new users of China Unicom and China Telecom from January to April. Third: Is the decline in China Unicom and China Telecom users closely related to the lack of FDD licenses? According to the author, although China Mobile has carried out large-scale 4G promotion, the number of China Mobile 4G users increased by only 2.005 million in April, which is not a significant increase, and a large number of users are still waiting and watching. Moreover, China Mobile's new 4G users mainly come from existing China Mobile 2G/3G users, which has nothing to do with the fact that competitors do not have FDD licenses. However, the situation is not that simple. Since the issuance of 4G licenses on December 4, 2013, China Mobile has developed more than 4 million 4G users in just a few months, and this is achieved under the premise that 4G network coverage is not perfect. Moreover, China Mobile's large-scale 4G promotion strategy has successfully stabilized its own users who want to switch networks, and has also created a huge attraction for China Unicom and China Telecom users. Some people may ask, why can't China Unicom and China Telecom participate in the competition when all three companies have issued TD-LTE licenses? To answer this question, let's take a simple example: if a person wants to drive to get off work, then this person must first have the driving skills (first obtain a driver's license) and at the same time be able to afford a car (must have money). There is no doubt that both technology and funds are indispensable. For China Unicom, although its GSM/WCDMA network is fully compatible with TD-LTE and many mobile phones support it (equivalent to having a driver's license), China Unicom lacks sufficient funds for the construction of TD-LTE network (equivalent to not having money to buy a car). For China Telecom, not only is the investment in TD-LTE limited (equivalent to not having money to buy a car), but its CDMA network is not compatible with TD-LTE, and there are almost no mobile phones that support both CDMA and TD-LTE (equivalent to not having a driver's license). Precisely because of the lack of funds and technical limitations, although the three operators have obtained TD-LTE licenses, China Unicom and China Telecom cannot participate in the competition. Under such circumstances, China Mobile's large-scale 4G promotion not only reduced the loss of China Mobile users to China Unicom, but also successfully attracted a large number of China Telecom users who wanted to use 4G. If China Unicom and China Telecom had FDD licenses, they could legitimately participate in the 4G competition, retain users with their own 4G services, and reduce the attractiveness of China Mobile's 4G to their own users. However, under the premise of only issuing TD-LTE licenses, China Unicom and China Telecom have very limited support for TD-LTE due to lack of funds and technical limitations. As one grows, the other declines, and naturally the number of users cannot escape the fate of declining. It can be said that although the decline in the number of users of China Unicom and China Telecom is related to many factors, the main reason is that they do not have FDD licenses. Fourth: What is the purpose of the decline in the number of users of China Unicom and China Telecom? According to the author's point of view, the reason why China Unicom and China Telecom have shown a phenomenon of weak growth is to "use this method to persuade the government to issue FDD licenses." However, according to the previous analysis of this article, China Telecom is completely unable to participate in the competition of 4G due to the limitation of CDMA network, and is already in an extremely passive situation. Although China Unicom can participate in the competition with 42M HSPA network, due to lack of funds, its competitive advantage is also weakening. Under the large-scale promotion of China Mobile 4G, China Unicom is likely to follow the footsteps of China Telecom, and the number of new users will drop sharply or even decrease. Putting aside this objective fact, it is hard to believe that the decline in the number of users of China Unicom and China Telecom is a conclusion with ulterior motives. Fifth: Is it appropriate to issue FDD licenses now? According to the author's point of view, since the TD-LTE licenses issued by the government have not been recognized by China Telecom and China Unicom, China Unicom and China Telecom only invest a small amount to cope with it. If the FDD-LTE license is issued too early, the money spent by China Telecom and China Unicom will be wasted, which is expected to be severely criticized by many experts and industry insiders, and the government will eventually be caught in a dilemma. However, according to previous analysis, due to the dual limitations of funds and technology, China Unicom and China Telecom's support for TD-LTE is relatively limited. Since my country lags far behind most countries in the world in issuing 3G licenses, the huge investment in 3G networks by the three operators has not yet recovered its cost. In this case, the direct consequence of the state issuing 4G licenses is that the two operators except China Mobile lack funds for investment. This is caused by objective factors, not China Unicom and China Telecom are unwilling to invest. Due to the issuance of only TD-LTE licenses, the communication market has become completely unbalanced, which obviously violates the original intention of the state's telecom reorganization in 2008 to balance the three operators. Even if the FDD license is issued immediately, due to the lag in network construction, it will take at least half a year for China Unicom and China Telecom to truly participate in the 4G competition, and it will not have much impact on the competition pattern. It can be said that issuing FDD licenses now is not only not too early, but too late. Summary: Although the current sharp decline in the number of new users of China Unicom and China Telecom is determined by many factors, the most critical reason is that the Ministry of Industry and Information Technology does not issue FDD-LTE licenses. As mentioned before, due to lack of funds and technical limitations, China Unicom and China Telecom have very limited support for TD-LTE. Although China Mobile's 4G coverage is limited and there are many deficiencies in terminals and packages, China Mobile can fully attract China Unicom and China Telecom's users to migrate on a large scale through substantial subsidies by taking advantage of the dual advantages of funds and publicity. For a long time in the future, the communications market will present a situation where China Mobile completely monopolizes the 4G market. Finally, let's ask, since the author believes that "since the TD-LTE licenses issued by the government have not been recognized by China Telecom and China Unicom, China Unicom and China Telecom only invested a small amount to cope with it." If it is only a small investment to cope with it, why is there such a conclusion as "If the FDD-LTE licenses are issued too early, the money spent by China Telecom and China Unicom before will be wasted, and it is estimated that it will be severely criticized by many experts and industry insiders"? 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. |
Recommend
How to carry out advertising in the medical beauty industry? Case Analysis
Today, Qingguajun will share with you the analysi...
Review of the event operation planning process!
The essence of an event is communication, but the...
The first batch of Kuiper satellites was launched. How far is it from matching Starlink?
Recently, the Atlas 5 rocket successfully launche...
Where do new growth opportunities come from for information flow advertising?
Native advertising, brand-effect integration, inf...
Prevent the spread of unexplained acute severe hepatitis in children! The General Administration of Customs has made arrangements
In response to reports of unexplained cases of ac...
Exploring the "Euclid" of the Dark Universe
On July 1, 2023, the long-awaited Euclid telescop...
Guide to Writing an Event Planning Proposal
For new operators, they may have read countless e...
Marketing Planning: How do users make choices?
The greatest value of this article is to establis...
Is starting to live alone a sign of maturity?
© Aging Wisely Blog Leviathan Press: In the movie...
2022 omni-region marketing promotion strategy!
The dilemma of public domain traffic can only be ...
Overview of advertising in March, inventory of top advertisers for App and brand promotion!
According to the mobile advertising intelligence ...
Wilson: New Energy Vehicle Industry Monthly Report in June 2023
01. Market performance Overall performance of the...
10 tips for newbies to sell goods through live streaming!
How should a novice anchor do live streaming and ...
Pinduoduo's activity operation routine gameplay!
The most "showy" one in this Double Ele...
How can products improve order conversion rates?
I'm back. Since I joined the new company in J...