When will the new growth point of telecom operators come



On March 25, with the release of China Mobile’s financial report, the performance of the three major operators in 2020 has been released. In 2020, the revenues and profits of the three operators will grow year on year. However, from the financial information, the traditional communication business of the three operators is still in a downward trend, and the performance growth is largely due to broadband business and cost control. Industry insiders believe that broadband business potential is limited, and cost control is only a temporary solution. In the future, operators need to create more new growth points in 5g, cloud network, content and other new tracks if they want to maintain the performance growth.


通信业务下滑不断 运营商新增长点何时来

Decline of traditional business

According to the financial report, in 2020, the performance of the three major operating businesses increased year on year. Among them, the operating revenue of China Mobile was 768.1 billion yuan, up 3% year on year, and the profit attributable to shareholders was 107.8 billion yuan, up 1.1% year on year; the operating revenue of China Telecom was 393.6 billion yuan, up 4.7% year on year, and the profit attributable to shareholders was 20.9 billion yuan, up 1.6%; the revenue of China Unicom was 303.8 billion yuan, up 4.57% year on year, and the profit attributable to equity holders was 12.493 billion yuan, up 10% year on year .3%。

In terms of business types, the traditional communication services of the three operators continue to decline. Among them, in 2020, China Mobile’s voice business revenue was 78.782 billion yuan, a year-on-year decrease of 11.1%; China Telecom’s voice business revenue was 40.866 billion yuan, a year-on-year decrease of 9.5%; China Unicom’s voice business revenue was 35.49 billion yuan, a year-on-year decrease of 10.1%.

In contrast, broadband business is becoming an important revenue growth point for the three operators. Among them, China Mobile’s broadband access revenue reached 80.8 billion yuan, a year-on-year increase of 17.4%; China Telecom’s broadband access revenue reached 71.9 billion yuan, a year-on-year increase of 5.1%; China Unicom’s broadband access revenue reached 42.6 billion yuan, a year-on-year increase of 2.4%.

In addition, in order to control costs, the three operators have significantly reduced marketing costs. In 2020, the sales expenses of China Mobile will be 49.943 billion yuan, a year-on-year decrease of 5.4%; the sales, general and administrative expenses of China Telecom will be 55.05 billion yuan, a year-on-year decrease of 4%; the sales expenses of China Unicom will be 30.46 billion yuan, a year-on-year decrease of 9.2%.

Recently, after China Telecom officially announced the process of returning to a shares, it is rumored that China Mobile will also take similar measures. At the 2020 annual conference call, Yang Jie, chairman of China Mobile, made a positive response to this rumor.

“Going back to a is conducive to the development of the company, and it will also give customers more opportunities to share the benefits of the company’s growth and development.” Yang Jie said that China Mobile has noticed that the mainland capital market has issued a series of new policies in recent years, which provides a favorable environment for red chip enterprises to return to A. It is actively tracking and studying and communicating relevant policies in a timely manner. If there is any definite information in the next step, it will disclose it in time according to the regulatory requirements.

Only telecom users grow

Beijing business daily noted that despite the year-on-year growth in both revenue and net profit, the performance of the three major operators in terms of user development in 2020 is quite different. China Telecom is the only one of the three major operators with positive growth in the number of mobile users.

According to the financial report, by the end of 2020, China Telecom had a net increase of 15.45 million mobile users in the whole year, and the user market share increased to 22%; China Mobile had a net decrease of 8.359 million mobile users in the whole year, and China Unicom had a net decrease of 12.664 million mobile users in the whole year.

“The net growth of China Telecom’s mobile users is mainly due to two reasons: one is that China Telecom has a good broadband user base, and the other is that China Telecom’s low-end packages are far more abundant than its competitors. However, there are few 2G and 3G users in China Telecom, and it will be more difficult for China Telecom to maintain its net growth in the next step. ” Fu Liang, an independent Telecom analyst, said.

In terms of overall user scale, by the end of 2020, China Mobile has 942 million users and 165 million 5g package users; China Telecom has 351 million users and 86.5 million 5g package users; China Unicom has 306 million users and 70.83 million 5g package users.

Although the number of mobile users and 5g users of China Mobile are the first, the penetration rate of 5g users is obviously behind the other two. By the end of 2020, the penetration rate of 5g users of China Mobile, China Telecom and China Unicom will be 17.6%, 24.6% and 23.2%, respectively.

Fu Liang said that the low penetration rate of 5g users, on the one hand, shows that the proportion of users using 2G, 3G and low-cost packages is still high among China Mobile’s mobile users; on the other hand, it also shows that China Mobile’s 5g tariff is not attractive to users, coupled with the better experience of users’ 4G network, and users’ motivation to switch to 5g packages is weak.

In view of whether China Mobile will consider introducing new measures to improve the penetration rate of 5g users next, Beijing Business Daily reporter wrote to interview the relevant person in charge of China Mobile, but as of press release, no reply has been received.

Introducing “foreign aid” to seek transformation

“With China Telecom’s official announcement of a shares and China Mobile’s positive response to the rumor of returning to a shares, the competition among the three operators is expected to enter a new stage.” Ma Jihua, a senior Telecom analyst, said that it is a good time for operators to return to a shares. From the perspective of the overall environment, although they have experienced a round of decline, a shares are still on the rise. However, in order to be recognized by A-share investors, operators must tell a “new story” of transformation and development.

From the financial report, China Telecom is focusing on the digital transformation of cloud network integration. On March 9, China Telecom said in the announcement that the A-share issuance will help the company grasp the opportunity of economic and social digital transformation, promote the implementation of the strategy of “cloud to digital transformation”, and return to A-share. The funds raised by A-share will be used for new information infrastructure projects such as cloud network integration.

In 2020, China Telecom’s ICT business revenue will reach 13.4 billion yuan, a year-on-year increase of 33.4%; IDC and cloud computing business revenue will reach 23.4 billion yuan, a year-on-year increase of 26.1%; IOT business and big data business revenue will reach 4.2 billion yuan and 1.7 billion yuan, a year-on-year increase of 39% and 39.8% respectively.

Similar to China Telecom, China Mobile has been laying out cloud network and other services. However, China Mobile also hopes to tell a good “story” of its content business. In the financial report of 2020, China Mobile clearly described “digital content” as one of the important areas it is deeply cultivating in emerging markets.

In terms of content business, besides relying on itself, China Mobile is also actively introducing “foreign aid”. Last year, China Mobile and China Radio and television signed a cooperation agreement, and the two plans to jointly create a “network + content” ecosystem and carry out cooperation in content, platform, channel and customer service.

Ma Jihua believes that there is a strong complementarity between China Mobile and China Radio and television in terms of content business. China Mobile has Migu brand, while China Radio and television has a large number of satellite TV resources. It can not be ruled out that the two companies will cooperate to launch a large number of “voice + traffic + broadband + TV” fusion sets in the future.

As an operator already listed in a shares, China Unicom plans to enhance its competitiveness by strengthening cooperation with mixed reform shareholders. “The company will actively lay out the new track, establish several strategic cooperation centers and joint laboratories with Baidu, Ali and JD, explore 5g business application scenarios such as artificial intelligence and edge computing, and make use of mixed shareholder resources to create differentiated competitive advantages.” China Unicom financial report said.

Beijing Business Daily reporter Qian Yu Pu Zhenyu

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