Stability is the main theme of the three major operators' leadership changes

Stability is the main theme of the three major operators' leadership changes

The "collective change of leadership" of the three major operators, which had been "rumored" for nearly half a year, finally came to fruition yesterday. At 9 a.m. yesterday, Wang Jingqing, deputy director of the Organization Department of the CPC Central Committee, announced the decision of the CPC Central Committee and the State Council on the change of the main leadership of China Mobile Communications Group Corporation. Shang Bing will serve as chairman and party group secretary, and Xi Guohua will no longer serve as chairman and party group secretary. At the same time, China Telecom and China Unicom have also announced internally that China Telecom Chairman Wang Xiaochu and China Unicom Chairman Chang Xiaobing have swapped positions.

After 11 years, the three major operators have collectively changed their leaders again.
Stability first, change second
The industry believes that due to the impact of the Internet, operators are already facing tremendous pressure to increase revenue and profits, and they also have to implement the national policy of "speeding up and reducing fees". The new batch of flag bearers who are rotated have to continue to face the harsh external environment.
The decline in business is reflected in the weak growth of revenue and profit in the financial report. In the first half of this year, China Mobile's operating income increased by only 4.9% year-on-year, while China Unicom and China Telecom both saw a decline in operating income, down 3.3% and 0.6% year-on-year respectively. In terms of net profit, in the first half of this year, China Mobile and China Telecom's net profit fell by 0.8% and 4% year-on-year, while China Unicom only slightly increased by 4.5%.


In particular, voice services, which used to be a "profit cow", have been impacted by Internet services such as WeChat Phonebook. Statistics from the Ministry of Industry and Information Technology show that although the number of mobile phone users has maintained a slight increase, the volume of mobile phone calls has been negative year-on-year for six consecutive months. From January to June this year, the length of outgoing mobile phone calls nationwide reached 1.4 trillion minutes, a year-on-year decrease of 2.4%. Mobile SMS business continued to decline due to the replacement of Internet application business. From January to June, the volume of mobile SMS business nationwide reached 361.22 billion, a year-on-year decrease of 4.7%.
Industry insiders believe that the positioning of the operator industry is confusing. On the one hand, they have to assume the obligation of providing basic information services and respond to and implement the country's "speed up and reduce fees" policy - this will inevitably increase the pressure on revenue and profits. On the other hand, their revenue and profits will be assessed as pure market entities. The new batch of flag bearers who are rotated will have to continue to face the harsh external environment and greater performance assessment pressure.
However, Zhou Ming (pseudonym), a source close to the operators, pointed out to Southern Metropolis Daily that the “speed up and reduce salaries” policy is actually a signal released by the state to adjust the positioning of operators, that is, “the trend of operators is very clear: operators must also do a good job in basic information services, and profits and competition are secondary. The new round of executives are not going to increase corporate revenue and profits by operating market-oriented management methods, so the new round of executives will not face too many problems in the future.”
Xiang Ligang, president of Feixiang.com, also believes that the new round of rotation will be mainly stable, with changes as a supplement. "The primary reason for this rotation is that Xi Guohua has reached retirement age. On the other hand, Chang Xiaobing and Wang Xiaochu are deputy ministerial-level cadres. According to the management principles of the Organization Department of the CPC Central Committee, a five-year rotation is also a normal trend to avoid the formation of a potential economic chain." Xiang Ligang told Nandu reporters that several top leaders will also reach retirement age in a few years, and the current idea is definitely to maintain stability, and will not take the initiative to make many big innovations. "It will not have much impact on the overall market structure."
It is worth noting that after completing this rotation, Shang Bing and Wang Xiaochu achieved the "grand slam" of rotation among the three major operators.
Focus on service rather than competition
If the new positioning is followed, the operators will focus on services rather than competition, and the lives of operators' employees will be relatively more "stable and comfortable" in the future. However, the price of comfort is reduced income, and mobile employees are already facing this choice.
An internal source of the operator revealed to Nandu that the salary reduction plan of China Mobile has been issued from the group to each provincial company. The group has given a new salary range, and each provincial company will formulate its own specific implementation plan within the range, which will be implemented from September 30. The source revealed that the salary reduction plan set by the group is: the annual pre-tax salary of the bosses of each provincial company is about 900,000 yuan, and the deputy general manager is about 800,000 yuan, a reduction of about 50%; the annual pre-tax salary of the provincial company department director level is about 600,000 yuan, and the annual pre-tax salary of the department deputy director level is about 500,000 yuan, a reduction of about 30%; the treatment of most other employees will not be adjusted, but the benefits, including subsidies for telephone fees and transportation fees, will be reduced.
Industry insider Gao Liang (pseudonym) revealed to Nandu that China Mobile Group executives will also have their salaries cut. After the salary cut plan is implemented, Shang Bing's pre-tax salary may be 700,000 to 1 million yuan, "but his (Shang Bing's) income is still higher than that of the cinema chain in the Ministry of Industry and Information Technology."
The salary cut plan has not been officially confirmed by China Mobile. But it is almost certain that the salary cut will be significant. This also means that in addition to facing the same harsh external environment as China Telecom and China Unicom, Shang Bing, who has just become the chairman of China Mobile, will have to face the problem of increased staff turnover and morale setbacks caused by salary cuts.
However, Gao Liang believes that "there will be some resignations due to salary cuts, but it will not be as serious as the outside world says." He analyzed that, first, only about 10,000 people in China Mobile had their salaries cut directly, and the income of grassroots employees is higher than that of China Unicom and China Telecom. Second, capable people will leave even if their salaries are not cut. Currently, there are two main levels of employees leaving China Mobile: one is middle and senior management with connections and resources, and the other is young employees born in the 1980s and 1990s. A large number of middle-level employees will not leave.
The salary cut at China Mobile is actually a microcosm of the new round of SOE reforms that began at the beginning of this year. Industry insiders pointed out that this round of SOE reforms actually sent a clear signal: SOEs will not rely too much on individual abilities in the future, will not pursue profits and competition, will be relatively more stable, and will reduce employee pressure, but their income will also decrease accordingly.

[Related Links] The styles of the three top leaders

Zhang Yi, general manager of iMedia Consulting: Wang Xiaochu is a person who has a global control and strong overall coordination ability. During his tenure as general manager of China Telecom, his greatest highlight was the institutional reform. For example, in 2012, he made eight major base projects such as Tianyi Reading and Tianyi Video independent enterprises. As for Chang Xiaobing, he is strong in innovative business and achieved outstanding results in developing WCDMA users in the 3G era. In 2008, Chang Xiaobing introduced SK Telecom, the largest mobile phone operator in South Korea, to invest in China Unicom, which was a relatively bold move.
Xiang Ligang, President of Feixiang.com: The top leaders of the three major operators must meet several principles: technical background, sufficient management experience, and political reliability. Shang Bing has a steady pace, Wang Xiaochu has a broad vision, and Chang Xiaobing has a good sense of the Internet. For example, as early as 2000, when he was the director of the Telecommunications Administration Bureau of the Ministry of Information Industry, he planned the Internet Conference, which has had a far-reaching impact in recent years. The assessment will also be adjusted according to the new positioning.

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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