Three Operators Entered The Difficult "Labor Pains": Traditional Business Growth Was Weak, And 5G Capital Expenditure In 2020 Was 180 Billion 300 Million.

Recently, the three major telecom operators in China announced their earnings in 2019.

From the revenue data, China Mobile's revenue in 2019 was 745 billion 900 million yuan, an increase of 1.2% over the same period last year. China Telecom's revenue was 375 billion 700 million yuan, down 0.4% compared to the same period last year, and China Unicom's revenue was 290 billion 500 million yuan, down 0.1% compared to the same period last year. The results of the three companies were almost flat compared with the previous year, with only a slight increase in China Mobile, while China Telecom and China Unicom fell slightly.

The net profit was mixed, with China Mobile's net profit of 106 billion 600 million yuan, a year-on-year decrease of 9.5%, net profit of China Telecom 20 billion 500 million, a decrease of 3.3% compared with the same period last year, and China Unicom's net profit of 11 billion 300 million yuan, an increase of 11.1% over the same period last year. A single largest China Mobile fell the most last year, and China Unicom, which had the smallest base, rose.

In the context of speed raising, cost reduction, 4G dividends and 5G investment, the three operators are experiencing a "painful" transformation period.

The good news is that 5G, which is closely related to operators, will bring new momentum. The recent policy stimulus is constant. Since March, we have mentioned the 3 topic of speeding up the construction of 5G. The latest is in March 24th. The Ministry of industry and Commerce has clearly proposed to speed up the development of 5G.

In March 23rd, Wang Zhiqin, vice president of China information and Communication Research Institute, said in an open class that the life cycle of 5G development is from 2020 to 2030. With the comprehensive deployment of 5G after 2019, it is predicted that by 2025, the total number of mobile phones will reach 5 billion, and the base station construction will reach 6 million 500 thousand. Driven by the main industry, the scale of the upstream and downstream industries is expected to be considerable.

5G, which is closely related to operators, will bring new kinetic energy. - Gan Jun photo

Traditional business is weak.

At present, the three operators face multiple challenges, first of all, the slowdown in traditional business revenue growth and even the decline.

As for mobile user data, by the end of 2019, China Mobile had reached 950 million mobile customers, including 758 million 4G users, 79.79% penetration, 336 million mobile users, 281 million 4G users, 83.88% penetration, 318 million mobile subscribers and 254 million 4G subscribers with a penetration rate of 79.87% for China Telecom.

Although the number of three mobile subscribers is still growing, the growth rate is slowing year by year. In 2019, China Telecom's mobile subscribers grew by 10.89%, China Mobile's year-on-year growth of 2.7%, and China Unicom's growth rate by 0.95%, respectively, which was weaker than 21.2%, 4.28% and 10.9% in 2018.

At the same time, the traffic volume of operators has increased rapidly. However, the growth rate of traffic revenue has not been greatly affected by such factors as speed up, cost reduction and price war. China Unicom's revenue has also declined. In 2019, China Mobile's Internet traffic increased by 90.3% compared to the same period last year. The online DOU (per household monthly Internet traffic) reached 6.7GB, and the traffic revenue was 384 billion 999 million yuan. The Internet DOU of China Telecom and China Unicom were 6.19GB and 8GB respectively, with traffic revenue of 123 billion 200 million yuan and 102 billion 800 million yuan respectively.

Looking at the fixed broadband network, China Mobile fixed broadband subscribers reached 172 million, an increase of 17.1% over the same period, the number of users ranked first, China Telecom fixed broadband users reached 153 million, net growth of 7 million 340 thousand households, ranked second, and China Unicom fixed line broadband subscribers increased by 2 million 600 thousand households, with a total number of 83 million 480 thousand households.

In recent years, China Mobile has been aggressively aggressive in marketing broadband business, grabbing a lot of shares and ranking first. But from the perspective of comprehensive ARPU (average revenue per household), China Mobile is 35.3 yuan, lower than China Telecom's 42.6 yuan and China Unicom's 41.6 yuan, which is also related to China Mobile's low price package strategy. From the perspective of broadband revenue, China Telecom and China Unicom have slipped.

In addition, operators' voice business continued to slide unsurprisingly, China Mobile's year-on-year decline of 18%, China Telecom's year-on-year decline of 11.1%, and China Unicom's year-on-year decline of 14.3%.

With the industry approaching the ceiling, operators are in urgent need of 5G conversion, bringing new users and higher and more yuan income.

5G users are expanding rapidly. According to the latest data disclosed by operators, as of the end of February 2020, China Telecom's 5G package size has reached 10 million 730 thousand users, and the number of users of China Mobile 5G packages has reached 15 million 399 thousand. China Unicom expects 5G subscribers to develop rapidly in the second half of this year.

However, people in the industry pointed out to the twenty-first Century economic news reporter that the current number of 5G packages can not be directly matched with the 5G users. For example, 4G users do not change 5G phones, they can also choose to use 5G packages, and also enter the data.

Role change to find 5G opportunities

In the past, operators in the industry belong to the "pipeline" role. In the era of 5G, operators also want to break the pipeline thinking, not only to do the underlying infrastructure, but also to participate in the 5G application industry chain, explore new business models.

At present, China is still in the stage of large-scale construction of 5G. In 2020, the investment quota of the three major carriers 5G increased substantially, representing a total of about 180 billion 300 million yuan, accounting for more than half of the annual budget.

Among them, China Mobile's capital expenditure in 2019 was 165 billion 900 million yuan, and 5G related investment was 24 billion yuan. In 2020, the capital expenditure budget was 179 billion 800 million yuan, and the 5G related investment plan was about 100 billion yuan.

The China Telecom invested 9 billion 300 million yuan in 5G in 2019. It is estimated that capital expenditure will be about 85 billion yuan in 2020, of which 5G capital expenditure is about 45 billion 300 million yuan, accounting for 55.3% of total capital expenditure. In 2019, China Unicom 5G capital expenditure is about 7 billion 900 million yuan, and 2020 capital expenditure is estimated to be about 70 billion yuan, of which 5G expenditure is about 35 billion yuan, accounting for 50%.

According to the financial report, in 2019, China Unicom and China Telecom have jointly opened 50 thousand 5G base stations in 5G construction, saving a total investment of about 10 billion yuan. In 2020, the goals of the three families were also very clear. The total construction of 600 thousand base stations was completed throughout the year. China Mobile said that the number of 5G base stations will reach 300 thousand by the end of 2020. The China Telecom said that it will strive to complete the 250 thousand quarter with the China Unicom and build 250 thousand 5G base stations in the three quarter, covering all the cities in the country, and striving to achieve the goal of building 300 thousand base stations by the end of the year.

An operator of Zhejiang province told the twenty-first Century Business Herald reporter: "this year, the epidemic will bring some impact, which will bring about 2 months or so of construction delay. But as long as resources are in place, construction is not a problem. The number of 5G base stations actually built this year will be more than that announced. The group has asked us to complete the whole year construction task by the end of June, and the pressure this year will be even greater. "

On the other hand, the more crucial part of the operator's "exit" is the B end scenario, because 5G is not only applied to the mobile Internet, but will also play a huge role in the mobile Internet of things. In the era of 4G, WeChat has grown out of phenomenal products such as WeChat, jitter, and the US. Its volume is far more than that of the similar products in the era of 3G and 5G. In the era of 5G, it will also have more large-scale applications at C and B terminals. How operators participate in it and how to form a new mode of interest segmentation is an important topic.

At present, video, cloud games, health care, transportation and industrial manufacturing have become the direction for operators to explore. For example, Li Xiangjun, a senior expert of China Mobile network security research and development center, told reporters that in 2019, China Mobile launched a smart port security application project based on 5G SA on the joint Ningbo port and HUAWEI, and explored the reform of port infrastructure, transportation organization mode and business formulation mode.

According to the prediction of China information and Communication Research Institute, from 2020 to 2025, in the field of information consumption, 5G will drive the consumption of mobile data traffic of 1 trillion and 800 billion yuan, and the consumption of information services of 2 trillion yuan will reach 4 trillion and 300 billion yuan for the consumption of new terminals. How to break the pipeline thinking and find new opportunities for 5G combined with cloud computing technology is the next point.

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