Chapter 30 5. Telecommunications industry - failure without technical content

Although the telecom industry is a fairly technology-heavy industry, in the next ten years, the failures encountered by Chinese telecom operators are likely to have nothing to do with technology. Although from a global perspective, the future of China's telecommunications industry looks no different from what it has been in the past 10 years.However, the competition throughout the industry is bound to become more intense. For enterprises, it is not an easy task to gain a competitive advantage in the industry. Topic Introduction: The Era of Comprehensive Competition - Hidden Rules of the Telecommunications Industry - A Failure Without Technical Content

In the past 20 years, the system reform of China's telecommunications industry has experienced countless ups and downs, from the earliest division of post and telecommunications, to the birth of China Telecom, and then from the unified country to the six major telecommunications companies. Fission and fusion between enterprises have pushed China's telecommunications industry to the focus of people's attention time and time again. The telecom reorganization in mid-2008 and the issuance of 3G licenses in 2009 marked the beginning of a new round of telecom system reform and also the beginning of a new round of comprehensive competition.

In the next ten years, apart from the three major operators with their own strengths, the involvement of foreign capital is likely to make the pattern of China's telecommunications industry more chaotic. After the arrival of these new competitors, many new businesses will be gradually introduced to the market, and the competition among operators will also expand from micro marketing methods to macro development strategies, from business operation models to small businesses. The specific business form, around the fast cake of the user market, an invisible war is bound to start in full swing.

It can be said that the next ten years will set the tone for the development pattern of China's telecommunications industry. During these ten years, countless legends are likely to be brewed, and countless failures will be created at the same time. Therefore, we will try to start from the operating mechanism of the telecommunications industry, and make a rational prediction of the prospects of this industry in the next 10 years. In China, the telecommunications industry has always been a high-tech industry, and its unique nature of property rights also makes this industry present a very different look from other industries. It can be said that for most Chinese people, this It's an extremely unfamiliar field.

So, what is the real face of the telecom industry? For the telecommunications industry, the most important business task is to establish and maintain a mature telecommunications network. Regardless of whether the network is based on fixed lines or wireless, or higher-level technical means, the initial cost is sufficient for ordinary investment. It is no exaggeration to say that if paper money is used to measure this input, then its unit of measurement will be several trucks! When this situation exists, it actually means that an extremely solid entry barrier is provided for this industry, which actually represents an invisible protection for enterprises in the industry.

If the later operator intends to enter this industry, he will inevitably face the threshold of raising capital, and this requires him to provide a perfect development prospect to the owner of the capital, so that investors feel that there are huge profits. Impressing investors and successfully obtaining investment is one of the most difficult actions in the business world, especially in a field like the telecommunications industry that requires huge funds. Once the investment is successful, it is by no means a small sum. Therefore, the whole Investors all over the world are cautious about this, lest they encounter the embarrassing situation of being locked up in funds and losing more than they gain.

However, in the past ten years, changes in several major factors have laid a material foundation for the emergence of a new pattern in the telecommunications industry in the next ten years. The first thing to change is technology. In the past 10 years, the maturity of Internet technology has made the telecommunications industry achieve great breakthroughs in technology. Due to the convenience and universality of the Internet, it has greatly reduced the cost of establishing and The cost of maintaining telecommunications networks. The second is institutional changes. In fact, what we have failed to notice is that in the wave of economic system reform, many local governments intend to promote local economic development and have given policies to establish local networks, which means that Newly entered operators can obtain a new living space outside the inherent system, thus making it possible to increase the value of capital independently.

Finally, there is the geometric expansion of the user base, which is well understood by each of us. Since the late 1990s, wireless services have spread rapidly across China. One of the most typical signs is - Widespread popularization of mobile phones.Today, this communication tool is no longer the exclusive product of a few people, and this means that latecomers have a huge profit goal and will never worry about the lack of users. When these three factors are superimposed, the significance to the latecomers is extraordinary. With these three changes, latecomers who intend to enter the telecommunications industry can provide investors with very attractive adventure stories. .

When so many adventurers tried to line up to grab a share of the action, the solid barrier formed by the huge capital demand was disintegrated little by little, and finally disappeared. Although the telecom industry is a fairly technology-heavy industry, in the next ten years, the failures encountered by Chinese telecom operators are likely to have nothing to do with technology. When a huge amount of capital enters the telecommunications industry, it will inevitably have a strong impact on this industry, and this impact is mainly reflected in two aspects, one is the inherent enterprises in the industry, and the other is new entrants.

For companies inherent in those industries, the intervention of huge amounts of new capital means a surge of competitors. These new operators, in order to seize market share and get a piece of the big cake of the telecom industry, will surely Make a big fuss about price. As far as consumers are concerned, price is one of the most important factors that determine demand, and the resulting loss of users is inevitable. Conversely, when a large amount of new capital pours into the telecommunications industry at once, its negative impact on new operators is equally huge. For these new operators, the pressure of competition also exists. Compared with the established telecom companies, their tasks are more difficult. If they want to become a mature telecom company, they must constantly maintain their own operating networks. Satisfying changes in customer needs and responding to competitive pressures requires a considerable amount of capital investment. Therefore, the demand for follow-up capital will make many latecomers deeply involved.

In addition, due to the huge cost of network construction, the capital turnover of telecommunications companies is extremely slow. It can be expected that even if these new operators gain a firm foothold in the telecommunications market, their investment and income can only be reduced. For a long period of time, it was maintained at the level of balance of payments.And when they want to develop a large-scale new business, their demand for follow-up capital and the urgency of paying off the interest on the previous investment are even more severe. In fact, even if such a situation has not yet become a reality, the decline of the telecom industry has been clearly seen in the statistical data obtained this year. Guangdong, the most economically developed region in China, has experienced a year-on-year negative growth in telecom business revenue for four consecutive months this year, and negative growth in the number of telephone users for three consecutive months.And this situation has never happened in the thirty years since the reform and opening up. In the first four months of 2009, Guangdong Province accumulated 40.14 billion yuan of revenue from main telecom business, a year-on-year decrease of 2.79%. However, in terms of total telecom business, there was a positive growth of 7.1%. , In contrast, China's telecommunications industry has shown an embarrassing situation of "increasing but not increasing income". The reason for such a situation is largely due to the fact that China's telecommunications industry has experienced more than 20 years of advanced development, making the telecommunications market increasingly saturated, which greatly limits the market growth space. At the same time as the tariff level keeps decreasing, the unexpected financial crisis has further exacerbated this trend. What is presented before our eyes is the worrisome future of the communication industry. For the entire industry, its future development prospects depend to a large extent on the adjustment of rules and the operation of capital, which means that in the next ten years, successful and unsuccessful telecom companies, their The main area of ​​competition will focus on funding. Although from a global perspective, the future of China's telecommunications industry looks no different from what it has been in the past 10 years.However, the competition throughout the industry is bound to become more intense. For enterprises, it is not an easy task to gain a competitive advantage in the industry.