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A few days ago, with the release of China Telecom’s first quarter report, the top three national operations announced their first quarter results in 2020.The journalist resolved and discovered that the net profit of the operators has decreased to various degrees this season, and the number of 5G subscribers is 50 million.
From a business development perspective, 5G, as the leader of the new infrastructure, will usher in rapid development this year; The top three carriers recently announced that they will jointly launch 5G messages to natively transform and update traditional short messages. However, people in the industry believe that in the short term, 5G news will face difficulties like unclear loading models and how to develop merchants.
Operators Deliver First Quarter Transcripts and Decline in Net Group Earnings
According to the reporter’s statistics, the top three operators made a total of approximately 32.488 billion yuan in the first quarter and about 357 million yuan per day, slightly less than the 362 million yuan in the same period of 2019.
In the first quarter, in addition to a slight increase in China Unicom’s revenues, China Mobile and China Telecom’s revenues decreased slightly. At the net profit level, the three companies collectively decreased; Among them, China Unicom had the largest decrease of 13.8%.
Regarding the reason for the decrease in profits, the three main operators mentioned the impact of the epidemic. China Mobile said that due to the impact of the new crown epidemic on sales of mobile phones, Internet of Things equipment and other commodities, sales and other sales revenue fell 34.9% yoy.
China Unicom said that since the beginning of this year, the new corona epidemic has caused certain challenges to the group’s operations, especially in business development, new user development, 5G network construction, and bad debt risks. China Telecom also said that due to the epidemic, user development has slowed.
In this sense, independent telecommunications analyst Fu Liang believes that, in general, the new corona epidemic will not only affect the development of new users by operators, but will also have a certain impact on its commercial structure, including the accelerated decline in voice calls and the increase in mobile Internet traffic, but it has little effect on the fundamentals of operators.
According to data published by the Ministry of Industry and Information Technology, in the first quarter, total income from the telecommunications business was 338.3 billion yuan, an increase of 1.8% year-on-year. Among them, three basic telecommunications companies achieved an income of 222.4 billion yuan in the mobile communications business, an annual decrease of 1.9%, which represents the proportion of the telecommunications business It was 65.7%; revenues from the fixed communications business were 115.9 billion yuan, a year-on-year increase of 9.8%, and accounted for 34.3% of revenues from the telecommunications business.
In addition, in the first quarter, internet data centers, big data, cloud computing, artificial intelligence, and other startups fueled rapid growth in fixed value added and other business revenue. In the first quarter, the three operators completed a fixed value-added business income of 43.9 billion yuan, a year-on-year increase of 18.9%, an increase of 2.2 percentage points between January and February, boosting revenue growth for telecommunications of 2.1 percentage points.
Fu Liang believes that in addition to 5G, IDC, CDN and industrial Internet are the areas in which operators are growing the fastest. In the future, operator competition will not be limited to competition from the C-end consumer market, and the focus will be on industry solutions. Services contest for business users.
5G construction is catching up, and the number of users is controversial
2019 is the first year of 5G, and 2020 will be a year of rapid 5G development.
Currently, the new 5G infrastructure is accelerating. With the replacement of OTT and the commercialization of 5G, 5G services can become a new growth point for telecommunications operators. In terms of 5G construction, China Mobile has completely rushed, and China Telecom and China Unicom have teamed up to catch up. As the leader of the 4G era, China Mobile has an absolute advantage in 5G development.
Based on the data disclosed in the financial report, China Mobile still leads the number of 5G users. The financial report shows that in the first quarter, users of China Mobile’s 5G package reached 31.72 million, and users of China Telecom’s 5G package reached 16.61 million. The sum of Telecom and Mobile 5G package users has reached 48.33 million.
China Unicom has not disclosed the number of 5G users. However, according to the Ministry of Industry and Information Technology, at the end of March, there were more than 50 million users of 5G packages across the country. Based on this calculation, China Mobile 5G users account for more than half.
China Mobile has revealed the number of 5G users since the first quarter of this year. According to the data, the growth rate of its 5G subscribers is obvious, but the ratio is still small.
According to statistics from the China Information and Communications Research Institute, in the first quarter of this year, total national shipments of 5G mobile phones were 15.06 million units, plus 13.769 million units shipped last year, totaling less than 30 million units. This is quite different from 50 million. Furthermore, the spokesman for the Ministry of Industry and Information Technology Wenku revealed that there are more than 20 million 5G terminals that are actually connected to 5G networks with 5G equipment. Many people questioned that the number of users of 5G packages revealed by operators is not real 5G user data.
However, Fu Liang believes that as of May, as the number of 5G base stations increases and the coverage area of the network grows larger, this gap will narrow rapidly.
According to data released by the Ministry of Industry and Information Technology, as of the end of March, 198,000 5G base stations had been built across the country, an increase of 68,000 from the end of 2019. The Ministry of Industry and Information Technology Estimates that the number of 5G base stations across the country will exceed 600,000 by the end of the year, achieving continuous outdoor coverage in prefecture-level cities, key coverage in counties and towns, and indoor coverage in key scenarios.
Fu Liang believes that 5G development is less than a year and that large-scale construction has not yet started, it takes a long time to earn money. With the increase in users and the improvement of network construction, 5G revenue will gradually increase, and the original high-end 4G users will also become 5G users.
Jointly promote the 5G message to activate the SMS business, business prospects are bleak
To revitalize short message service in the 5G era, the top three operators recently announced that they will force Rich Media News to jointly launch 5G messages to transform and update traditional short messages natively. Companies like Huawei, ZTE, Xiaomi and Samsung have also expressed their willingness to accelerate the launch and commercialization of 5G news.
Unlike traditional messaging, 5G messaging can integrate comprehensive information such as text, images, audio, video, and location. This change may change the form of the traditional chain of the SMS industry. GSMA is currently planning to incorporate 5G messages into the mandatory functions of 5G terminals. In the future, 5G terminals will support 5G message services.
For individual users, 5G messages will break the length limitation of each message by traditional SMS, and will also break the text limitation in terms of content, to effectively integrate text, images, audio, video, location and other information.
For governments and businesses, 5G messaging will provide an interface for information interaction between them and individual users. Governments and companies can send personalized services and information to users through rich media such as text, voice and tabs.
Relying on operators to have huge traffic, 5G messaging has a primary advantage in interconnection, and is seen by many people as a great weapon for operators to compete for WeChat, Alipay and other markets.
However, Fu Liang believes that 5G news is currently facing difficulties such as unclear charging models and how to develop merchants.
“If 5G news wants to drive big traffic, they must promote the use of merchants, but how operators compete with WeChat and Alipay to attract merchants is still a big problem,” said Fu Liang.
