Mobile traffic business revenue “slow growth”, emerging business revenue “prominent growth”, this is the Ministry of Industry and Information Technology routinely released the first half of 2022 communications industry economic operation disclosed, this report card is intriguing. To this end, All Media of Communication Industry Newspaper made an interpretation, “Editor’s Comment: What can be read from the” Report Card “of Half-year Communication?” Analysis of the trends and changes behind the communication industry, caused widespread concern in the industry. So, what do experts think of the communication half year operation? What’s reflected behind it?
Ma Jihua, Telecom and Internet analyst:
The future of communications depends on digital services
In the first half of 2022, the economic performance of the communications industry was obviously better than that of the national economy as a whole, and it also became the highlight of the whole society and economy in the stage of normalized epidemic control. In THE FIRST half OF THIS year, THE TOTAL REVENUE OF China’s TELECOM business reached 815.8 billion YUAN, which is in the stage of steady development as a whole. The growth is mainly driven by emerging businesses.
However, the data also showed that the growth of communications revenue slowed down in June compared with the previous May. We have also seen slowing growth in revenue from fixed Internet broadband and mobile data traffic, and the growth of mobile Internet traffic per household has begun to peak in developed eastern regions.
After two decades of rapid development, China’s communications industry has become the infrastructure for the construction of digital China. In terms of network infrastructure, the number of users and various applications, China has reached the advanced level of the world. At the same time, its own rapid growth has slowed down a few years ago, entering a period of maturity and stability, this trend has not been fundamentally changed by the surge of new business.
In the context of stable overall growth, the adjustment of the revenue structure of the communication industry has become the key to ensure sustainable development, and several operators are sparing no effort. As shown in the data of the first half of the year, the number of terminal users of the cellular Internet of Things is rapidly approaching the number of mobile phone users, which shows the rapid development of the Internet of Things. Meanwhile, cloud computing and big data revenue grew by 139.2% and 56.4% year-on-year, respectively.
From the perspective of the revenue structure of the communication industry, in the era of the gradual disappearance of demographic dividend, the growth of traditional voice business revenue and traffic revenue has slowed down. Even if 5G will improve users’ ARPU to a certain extent, it is inevitable that the main communication service revenue of operators under the traditional business model will gradually decrease in the proportion of the overall revenue.
Emerging businesses, especially those related to new infrastructure, are growing rapidly, but they cannot be “backbone” in the short term. Operators need to rely on traditional businesses to maintain stable development for a long time to smoothly complete the transformation of momentum.
Income structure of the industry is undergoing major changes, but the existence of the basic public service properties for the whole industry will get rid of traditional services and mode, completely thorough “ShuaiBaoFu” development is impossible, this requires the entire industry to quickly finish their own digital transformation, to explore new business model, from improving communication products to provide digital services.
In the future, communications revenue will no longer depend mainly on network services, traffic charges or terminal access, but on providing more valuable value-added services that customers need and sharing in new value chains created with ecological partners.
Min Hailan, consultant, Nomura Comprehensive Research:
Emerging business markets have reached a tipping point
At present, the overall operation of the communication industry is stable and good, but the revenue of mobile data traffic service increases by 0.7%, the growth rate is slow, and the contribution to the revenue is gradually reduced. The personal mobile user market has been basically saturated. In the early stage, the expansion of 5G users was mainly concentrated on high-end plan users. At present, the penetration rate of 5G is close to 30%, and the expansion of users is gradually dominated by low-end users.
The rise in mobile revenues is mainly constrained by two “innovation difficulties”. One is the innovation of killer application, the other is the innovation of mobile terminal. Because there is no application level demand, the terminal innovation power is insufficient, the user replacement power is insufficient. Application, terminal, flow three elements are linked, the main flow demand has not been stimulated. The market for individual users is increasingly zero-sum competition.
Under the background of national efforts to promote enterprise digitalization and smart city construction, operators’ digital emerging business revenue shows a rapid growth trend and becomes an important source of revenue growth. Among them, the year-on-year growth rate of cloud computing and big data revenue reached 139.2% and 56.4% respectively, the year-on-year growth rate of data center business revenue was 17.3%, and the year-on-year growth rate of Internet of Things business revenue was 26.9%. Affected by the epidemic in the first half of the year, the business development related to enterprise digitalization, industrial digitalization and urban smart has been restricted. The market demand in this area will continue to increase, the potential is huge, in the future will be a long time to drive the overall income growth of the main power source.
Entering 2022, the revenue structure of operators has shown obvious changes: emerging businesses are becoming the main revenue incremental force of operators. Traditional business market saturation, traffic dividend day gradually disappeared, operators continue to accelerate the process of digital transformation. In the first quarter of this year, the three major carriers’ emerging businesses grew 36.3% year on year, driving the telecom business revenue growth of 5.9 percentage points. Traditional communication services and personal mobile data traffic services are facing market bottlenecks. On the contrary, emerging services have huge market potential and have reached the point of imminent development. If the individual user market fails to break through the above two “innovation difficulties”, it is not unexpected that the revenue structure of the communication industry will face huge changes.
The emerging business is the field that the communication operator must cultivate deeply, the competition is bound to be fierce, this market will no longer be the operator monopolizes the world. Under the natural advantages of basic communication services, operators must break through the original status quo and thinking, and actively expand the extended services. The crux of mobile data traffic service lies in how to create new demand points. Although it is a relatively unfamiliar and high threshold problem for operators, it is also an area that cannot be abandoned.
Independent Telecom Observer:
New poles of growth: From people to things
According To the economic operation of the communication industry in the first half of 2022 released by the Ministry of Industry and Information Technology, the revenue growth of the traditional To C business of the three major operators has always been hovering at a single-digit level since 2018, while the emerging business such as Internet data center, cloud computing and Internet of things has been growing at a year-on-year rate of more than double digits. Assume the operator to drive business growth of the second curve.
With the disappearance of demographic dividend and saturation of mobile phone user penetration, To C market has become the stock market of the three major operators, the market structure is basically stable, and the market scale tends to peak. Therefore, the new growth pole of communication operators is bound to change from the connection between people and things to the connection between things, and the Internet of everything has thus become a new driving force for the development of communication technology. Therefore, among the emerging businesses, I pay most attention to the development of the Internet of Things business.
After several years of unremitting efforts, delighted to see three carriers by the end of June this year has developed 1.64 billion cellular Internet end users, compared with 1.67 billion mobile phone users, both size difference shrinks to 29.49 million households, accounting for mobile terminal connections (including mobile phone users and end users) cellular Internet of things the proportion is 49.6%. According to this trend, it is believed that the scale of cellular Internet of Things end users will definitely surpass mobile phone users within this year, and the proportion of mobile network terminal connections will continue to grow.
As the number of terminal users grew, iot business revenue also increased 26.9 percent year-on-year in the first half of this year. Although its revenue growth in the first half of the year was far lower than cloud computing’s 139.2% and big data’s 56.4%, the revenue level does not fully reflect the value of iot business to operators. To build a digital economy, the Internet of everything is the foundation. Only with the data connection, flow and convergence of the Internet of Things can big data, cloud computing and industrial Internet have a source of sustainable development. Especially for the communication operators who take “building connections” as their responsibility, the expansion of human connections to physical connections is not only the expansion of their existing operational capabilities, but also the maximization of their huge network investment and network capabilities.
In cloud computing market and Internet data center, the three major operators need to cross over from CT to IT and Internet giants to compete, and their advantages are not obvious. The competition in the Internet of Things market is still mainly between operators, and the underlying connectivity of the Internet of things can also become an advantage for operators, becoming a shortcut for them to break through the government and enterprise customers to obtain the overall digital solutions including cloud computing and data centers. Therefore, the three major operators should make iot the focus of their To B business development, promote the early realization of the digital world of everything interconnection, and gain business and strategic advantages from it.