Is it a tragedy that China Unicom and China Telecom do not have FDD licenses in the 4G era?
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Recently, the online article "China Unicom follows China Telecom in user growth crisis due to lack of FDD license" has caused heated discussion. Based on the record low number of new 3G users announced by China Unicom in April and the sharp decline or even net loss of new users announced by China Telecom in the past few months, the article concluded that the industry is well aware that the reason for the sharp drop in 3G users is that China Unicom and China Telecom did not obtain the FDD LTE licenses they hoped for. It also emphasized that the sharp decline in the number of new users of China Unicom should be the result of not having an FDD LTE license. Looking back at the news in the past few months, it can be found that similar views have been mentioned many times. It has been less than half a year since the issuance of TD-LTE licenses. Although China Mobile has advanced in 4G network construction, it can be seen from the data that the number of 4G users in the first four months has only increased by 4.798 million that it is too arbitrary to simply believe that the sharp decline in the number of 3G users of China Unicom and China Telecom is due to the failure to obtain FDD LTE licenses, and it is too childish to use this method to persuade the government to issue FDD licenses. According to the data released by the three major operators in April 2014, China Mobile added 3.531 million new customers in April, with a total of 784.613 million customers; the net increase of 3G users this month was 7.003 million, with a total of 3G users reaching 231.979 million; the net increase of 4G users was 2.005 million, with a total of 4.798 million. China Unicom added 895,000 new mobile users in April, with a total of 290.588 million users; the net increase of 3G/4G users was 2.11 million, with a total of 134.41 million users. China Telecom lost 1.03 million mobile users in April, with a total of 182.17 million users; the net decrease of mobile users from January to April 2014 was 3.41 million; the number of 3G users in April was only 830,000, with a total of 104.97 million users. There are several data worth noting from January to April: first, the total number of mobile users has reached 1.258 billion, second, the number of 3G users has reached 470 million (accounting for 37% of the total number of users), third, the number of 4G users is 4.798 million (only China Mobile is counted, 4G users account for 0.38% of the total number of mobile users), and fourth, the net outflow of telecom users from January to April is 3.41 million. From the above data, we can draw the following conclusions. First, based on the mainland population of 1.35 billion households, the number of 1.258 billion mobile users can basically declare that the demographic dividend has ended, and the difference between natural new users and off-network users is almost zero (first time using mobile communications and no longer using the mobile network for special reasons). Therefore, it can be inferred that the actual net increase in the number of users of the three major operators is negative except for China Mobile, and the increase in China Mobile is also declining sharply. For example, China Mobile's net increase in March was 5.878 million, but it dropped to 3.531 million in April. The positive figures announced by China Unicom can only mean that its bundling strategy is still working, and the phenomenon of multiple phones per household is very common. In addition, factors such as the reduction in terminal subsidies for operators brought about by the "business tax to value-added tax" and the resulting reduction in contract phones for bundled sales are also one of the reasons for the decrease in new users. Second, user migration is mainly concentrated in two aspects. One is the switch from 2G to 3G within the same network. According to the data in April, the monthly migration ratio only accounts for 1% of the total number of users, and the user migration intention is very low. The second is migration to the high-quality network of competitors. Due to network factors, at present, telecom users are migrating significantly to China Unicom 3G and China Mobile 4G, and the net loss of users is serious. Because the mobile user base is large, under almost the same user willingness to upgrade the network, the number of users migrating to TD-SCDMA is significantly more than that migrating to WCDMA and CDMA2000. Therefore, although the number of new mobile 3G users in April reached more than 7 million, this does not mean that users are more inclined to use the mobile 3G network. Third, China Mobile's new 4G users mainly come from the original mobile 2G/3G users, but under the huge user base and strong publicity campaign of China Mobile, the growth of 4G users is not obvious, which shows that consumers are still waiting. China Mobile's powerful advertising campaign did not fool too many users in the Chinese market where business knowledge is highly popularized. However, with the gradual increase in the number of 4G terminals entering the market, the reduction of mobile tariffs and the further improvement of network coverage, it is believed that the growth rate in the second half of the year will be more obvious. Fourth, due to network factors and the imbalance of early scale, 3G did not significantly change the pattern of the three major operators. At this stage, the 3G network characteristics of the three major operators are very distinct, and users obviously vote with their feet. Telecom is already in an extremely passive situation under the existing 3G standard; while China Unicom still has a network advantage window of at least half a year; Mobile 3G is between the two, but there is a clear gap compared with China Unicom. China 3G is likely to be weak in the later period, and it may be a short tail compared to the long tail effect of GSM! Fifth, for 4G, the TD-LTE license issued by the government has not been recognized by Telecom and China Unicom, and only a small amount of investment is made to cope with it, almost waiting for the FDD LTE license. This has caused a contradiction, which is also the main reason for the current open and covert fighting and escalation of verbal battles. If China Unicom and China Telecom do not make full efforts to develop TD-LTE, China Telecom will be greatly impacted if FDD LTE licenses are not issued as soon as possible; but if FDD LTE licenses are issued too early, the money spent by China Telecom and China Unicom will be wasted, and it is estimated that it will be severely criticized by many experts and industry insiders, and finally put the government in a dilemma. Another data worth noting is that in April 2014, the national mobile phone market shipments were 40.712 million units, a year-on-year decrease of 26.6%. Among them, the shipments of 2G mobile phones were 4.99 million units, the shipments of 3G mobile phones were 29.098 million units, and the shipments of TD-LTE mobile phones were 6.625 million units. In April 2014, the shipments of smart phones were 35.509 million units, a year-on-year decrease of 12%. This set of data shows that, first, consumers' willingness to replace new smart phones has declined significantly, and second, users who have newly replaced TD-LTE phones are not very enthusiastic about using 4G networks. Although shipments do not equal actual sales, this data is also of certain reference significance. According to the data released by China Mobile, 4G users are less than 1/3 of the shipments, and this type of users are more likely to invest in the future. Therefore, I believe that the sharp decline in the number of new users of China Unicom and China Telecom at this stage is caused by comprehensive factors, not just because of the lack of FDD LTE licenses. Moreover, at present, it has been less than half a year since the issuance of TD-LTE licenses. Although China Mobile has been too ostentatious in promoting 4G, after all, the network coverage is relatively limited, and the terminal link is still a shortcoming, which has not attracted large-scale migration of users. Even if China Telecom and China Unicom are issued FDDLTE licenses in the near future, they will need at least one year to build the network, and they will still not be able to prevent the decline in user growth or even net outflow. There are two questions next. If the government believes that its licensing strategy is correct, then China Unicom and China Telecom will have to re-examine their strategic deployment for TD-LTE, especially China Telecom; if the government believes that the licensing strategy is wrong, then I think it will continue to make mistakes and will not issue licenses until the end of the year. 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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