Analysis of the Future Development Trend of China's Communication Industry

What kind of pattern and situation will China's communications industry form in the future? This is not only related to 4G, but also related to the broadband China strategy, related to the separation of the intensive network industry and the integration of the three networks, and related to the policies related to the Third Plenary Session of the 18th Central Committee.

In the "Decision of the Central Committee of the Communist Party of China on Comprehensively Deepening the Reform of Some Major Issues" (the "Decision"), the Third Central Committee of the 18th CPC Central Committee mentioned: improving the state-owned capital management budget system and increasing the proportion of state-owned capital income to public finances, 2020 Mentioned 30%.

In 2008, the State-owned Assets Supervision and Administration Commission began to collect state-owned capital operating budgets from central enterprises, and the ratio of dividends paid was initially set at 5% and 10%. Later, the proportion increased by 5 percentage points. In the future, it is necessary to increase the ratio of 30% to pay, which is a big test for operators with current profitability decline.

The impact of the increase in the dividend payout ratio will not happen so quickly, and the impact of the tax reform on the “reform of the camp” is in sight. The telecommunications industry is likely to be included in the “VAT reform” pilot program from April 2014. If the 11% tax rate is adopted, the profits of the three major operators will drop sharply and the tax burden will increase significantly. Moreover, after the “reform of the camp”, the deductions involved in the deduction are complicated, and the financial management level and operation mode of the operators will be a major test. These are just external factors. For operators, the communications industry invested more than 350 billion yuan in 2014, of which 4G investment reached 100 billion yuan. This will make the operator's capital start to increase greatly, and the past two years will be too tight. 4G will inevitably make the three operators become ugly in the financial report data.

In the era of traffic management, the profit model shifts from traditional voice services to data traffic, which will be an inevitable choice for operators in the 4G era. The current decline in voice service revenue is a common problem faced by operators around the world and must be supplemented by traffic revenue.

In the survey of traffic demand, in a survey on the mobile 4G traffic package on a website, about 55.5% of netizens said “not applicable, I don’t need so much traffic”, but from other international countries, 4G According to business development experience, the increase in data traffic brought by 4G is significant, but the increase in user traffic is not equal to the profitability of operators.

How to do the fine operation of traffic? For the operator to carefully consider. In the 4G era, the unit price of traffic has dropped or become a trend. The mode of purely selling traffic has been proved not feasible by some foreign operators, which puts higher demands on domestic operators. The superiority of 4G will be reflected in the rich application and value-added services, but most users prefer to use the free WIFI Internet access. Only when they go out to use the 4G network to access the Internet, it is not difficult to understand that most of the global 4G operators are losing money. .

It is hard to say whether the main application of domestic 4G traffic is HD video like South Korea, but it is estimated that there will be more post-paid services. In the 4G era, the cooperation between operators and OTTs is more open. It is a trend. For example, some virtual operators or Internet of Things companies may purchase 4G traffic from physical operators to provide users with a better service experience. The cooperation between operators and Internet companies may result in more differentiation.

In the 4G era, the data service competition between operators will further intensify, and China Mobile's one-size-fits-all situation may be challenged.

In the 3G era, the three operators have basically tied themselves in the new market for mobile users. However, from the absolute value of operating income, especially net profit, China Telecom and China Unicom are far less than China Mobile. China Mobile has taken advantage of its position in the 2G era and established its absolute status as a king. Even in the 3G era, it has won a huge amount of profits from the voice business with nearly 800 million mobile phone user bases. The voice business has propped up a day of China Mobile and is a cash cow.

However, in the 3G era, the OTT business has had a huge impact on China Mobile's traditional business. Since the first half of last year, China Mobile's voice revenue growth has slowed significantly. After the 4G era is opened, the mobile terminal accesses the Internet faster, and the erosion and impact of the OTT service on the traditional voice and short message service will be more obvious than in the 3G era. Under this general trend, the revenue contribution of voice and SMS revenue to China Mobile will drop significantly, and its huge GSM network may become cumbersome, which makes China Mobile's user scale advantage no longer significant. If we say that China Mobile and China Telecom and China Unicom are between the elephants and the ants, then in the 4G era, the competition will be of the same size, and who has the big traffic data consumption habits will be the scale of mobile broadband users. It will be bigger, and whoever wins will be more likely. However, China Mobile's fixed-line capacity is weak. The more 4G users, the slower the mobile phone network speed will be. The addition of China Mobile's international export bandwidth resources is lacking, and the more old-fashioned is the problem of settlement fees between traffic networks.

Perhaps China Mobile, with its natural advantages of TD-LTE licenses, will be madly countering telecom broadband users after obtaining a fixed-line license, which will cause the mobile phone users of the telecom convergence package to be lost, but Telecom and China Unicom will strengthen cooperation with Internet companies. For example, Yixin launched a free Internet phone; the entry of virtual operators and the multi-mode multi-frequency function of 4G mobile phones laid a solid foundation for reshaping the new market structure. In addition, Telecom Unicom is actively promoting the endogenous power of information consumption. Operating the accounting unit, pushing the grid channel contract responsibility system, the spring of change and innovation has blown through the land of China. It is believed that the advantages of China Mobile's market share and profit will no longer exist in the next few years.