The September 7 news is different from the continued decline in the growth of communications service revenue. Since 2016, the proportion of fixed communications business revenue in the communications industry has continued to rise. According to data released by the Ministry of Industry and Information Technology, the proportion of fixed communications business revenue in communications service revenue rose from 27.6% at the end of 2016 to 28.1% at the end of 2017, and has now risen to 29.1% at the end of June 2018. In addition, from the end of 2016, the end of 2017, and the growth rate of the proportion in the middle of 2018, the proportion of fixed communication business revenue in communication service revenue is accelerating. The relative data comparison is shown in the table below. The growth rate of communication service revenue continues to decline, and the proportion of fixed communication services to revenue is accelerating. What enlightenment does this bring to the communication industry?
The transformation of the communications industry from voice to traffic operation, which started in the 3G era and accelerated in the 4G era, has rapidly increased the proportion of mobile communications business revenue in communications service revenue. Since last year, the traffic management strategy represented by various unlimited packages has stimulated the explosion and continuous growth of user traffic demand. Although the three major operators have tried their best to transform to traffic management, based on the operating results obtained from current business data, in addition to China Mobile's successful transformation in traffic management, it is difficult to say that the traffic management of China Unicom and China Telecom is successful. Even in the first half of this year, China Unicom and China Telecom's traffic revenue accounted for an increase in the ratio of communication service revenue. The relevant data are shown in the table above. In addition, it is particularly worth mentioning that the proportion of traffic revenue in the communications industry as a proportion of communications service revenue has begun to decline rapidly after a short-term high of 48.3% in April this year, and it has declined from 46.07% at the end of May to the end of June. 45.73%.
Traffic business revenue accounted for the proportion of communications service revenue, which rose from 42.2% at the end of April 2017 to the highest point of 48.3% at the end of April 2018. It took a whole year; from the highest point of 48.3% to the current 45.73% only It took 2 months. Analyzing the reasons for the rapid changes in the above data, we believe that there is the impact of the regulatory authorities' aggressive promotion of speed increase and fee reduction, and the rapid and large-scale promotion of unlimited packages in the communications industry. However, more family business represented by home broadband The rapid growth of revenue from fixed communications services has provided a lot of support. In fact, the public data of industry and information technology also confirmed the above inference. According to the "Economic Operation of the Communications Industry in the First Half of 2018" published by the Ministry of Industry and Information Technology, in the first half of the year, the three basic telecommunications companies achieved revenue of 195.8 billion yuan in fixed communication services, a year-on-year increase of 10%; and achieved revenue of 476.2 billion yuan in mobile communication services. A year-on-year increase of 1.8%. We can also say that it’s not that fixed communications revenue is growing too fast, and that mobile communications business revenue is growing too slowly; or it’s not that mobile communications business revenue is growing too slowly, and that fixed communications business revenue is growing too fast. In any case, the fixed communication service has become more and more important. Even with the continuous growth of mobile communication service user scale and the rapid expansion of user traffic demand and other two powerful factors, although mobile communication services have also grown rapidly, at present, the above results are still not reflected in revenue. , And the contribution to the growth of the overall communication service revenue is very limited.
Implications: From the perspective of the communications industry, mobile communications business revenue represented by traffic business revenue accounts for more than 70% of the entire communications service revenue. Therefore, mobile communications business must be managed well. In particular, the traffic business requires industry practitioners to re-examine existing business and competitive strategies. If traffic management has fallen asleep in the 4G era, how can operators get better in the 5G era? The analogy of "a bowl of soup" made by Mr. Liu Aili, the former president of China Telecom, in his speech at the 2018 Shanghai Station of the Mobile World Congress, industry professionals should pay enough attention to it and implement it into action as soon as possible.
The family business expanded rapidly, and began to play the role of incremental income contributionAs the scale of fixed-line telephone users continues to shrink, and the duration of fixed-line calls continues to shrink, the home business represented by home width + TV has begun to assume its due functions and exert the expected revenue increase effect. In fact, China Mobile's "Great Connectivity" strategy has included the "Digital Home Project" as one of the "Ten Major Projects". Of course, there are not only considerations for full-service operation, but also factors that lay the foundation for the construction of the Internet of Things such as smart homes in the future. However, as a latecomer in the fixed-line home broadband industry, it has obtained a fixed-line license at the end of 2013. After 5 years, China Mobile's home broadband users far exceed China Unicom, and even continue to narrow the gap with China Telecom. . China Mobile attaches great importance to home services represented by home broadband, and China Telecom has also begun to raise expectations for the growth of home broadband users. China Mobile has raised its annual fixed-line broadband user development target from 21 million to 30 million. In response to China Mobile, China Telecom has raised its broadband subscriber growth forecast to 12 million. China Unicom, which has bottomed out in terms of user scale, has become the third largest broadband player. Although user growth has been sluggish, home broadband revenue is still strong. And from China Unicom and China Telecom, especially China Unicom, we see the revenue contribution ability of fixed-line broadband. The relevant data are detailed in the table below.
Although China Mobile's home width has grown rapidly, its revenue contribution needs to be further improved. China Mobile mainly relies on various "gifts" to obtain a large number of users, which not only directly leads to the lowest ARPU for broadband users in the industry, but also causes the overall contribution of home broadband to the revenue of communication services to be low. However, broadband, as the entrance to the Internet of Things for various home services, may be what China Mobile wants to seize the most. We are also willing to believe that China Mobile's investment in such a large amount of manpower and material resources is definitely not only to break the home-wide monopoly of China Unicom and China Telecom, nor is it only to improve home user satisfaction. In the end, it must be based on the pursuit of user scale. Transition to the pursuit of income contribution. Just when will such a time point come? After the number of home broadband subscribers surpasses China Telecom, is it still at a certain point in time? We believe that China Mobile's home broadband subscriber scale surpasses China Telecom, and it may be expected to be realized before the first quarter of next year. In addition, China Mobile's "big connection" strategy mentioned the time node for home broadband revenue to reach 60 billion yuan by 2020, and objectively requires it to go from pursuing users to pursuing users and income within one year. In the end, the above goals must not only be achieved in advance, but also overfulfilled.
Implications: For China Mobile, it is necessary to pay more attention to user revenue contribution. For China Unicom, it is necessary to pay more attention to the growth of user scale. In the end, both will reach a business model similar to China Telecom's existing users and revenue. Of course, in addition to pursuing user scale and revenue growth, operators also need to improve broadband quality and user experience. Focus on the long-term, focus on building a smart home business ecosystem aimed at future operations, and increase cross-industry cooperation with Internet companies such as BATJ, and seek innovation in big video content, business models, etc., so as to develop more healthy competition and work together Maintain industry value.
The volume gap in the communications industry continues to expand and forms a "horn" with larger and larger openings. The volume gap in traffic revenue is the main reason for the continued expansion of volume revenue deviation. In the case of insufficient revenue contribution from mobile communications services, it is necessary for practitioners in the communications industry to reconsider their fixed communications business strategies.
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