China moves two legs to run Unicom

In the industry's many voices of disappointment, China Mobile’s financial report appeared in 2010, once again showing growth. Yesterday, China Mobile announced its 2010 annual performance report. In 2010, China Mobile’s revenue was 485.2 billion yuan, a year-on-year increase of 7.3%, and net profit of 119.6 billion yuan, a year-on-year increase of 3.9%.

However, compared to previous years, China Mobile has entered a relatively slow period of growth. New customers and ARPU (average paying user income) have dragged down the growth rate with the gradual reduction of tariffs.

Platform: Layout TD-LTE

In the face of slowing growth, China Mobile is looking for new points. In early 2011, China Mobile launched the construction of a TD-LTE scale trial network in Shanghai, Hangzhou, Nanjing, Guangzhou, Shenzhen, Xiamen, and Beijing, and plans to build more than 1,000 base stations in this year's TD-LTE scale trial network in 7 cities. .

According to the plan, China Mobile will launch the TD-LTE network card experience to users in the second half of 2011. The peak speed of the Internet will reach hundreds of megabits per second, which is more than 10 times the speed of the current 3G network and can carry broadband data such as online high-definition video conferencing. The business provides network support for the development of China Mobile Internet and Internet of Things.

It is understood that in October 2010, China’s dominant TD-LTE enhancement was selected as the 4G international standard, and together with LTE FDD, it became the 4G international two major standards. In December 2010, the Ministry of Industry and Information Technology approved the approval of the TD-LTE scale technical trial overall plan. According to the unified arrangement of the TD-LTE scale technical trials of the national major scientific and technological special projects by the competent government departments, China Mobile, as an operator, specifically undertakes the network construction, operation and maintenance of TD-LTE scale technical trials, and Huawei, ZTE, Datang, Shanghai Bell, etc. Equipment manufacturers, as well as HiSilicon, Chuangyi Video, Lianxin, Spreadtrum and many other chip makers participated in the scale test.

In the case that China Telecom and China Unicom’s two major competitors have not yet clearly expressed their respective LTE plans, China Mobile has been given a chance to take the lead. Mr. Lü Mouzhen, a member of the management consulting firm, told the “International Financial News” reporter that China Mobile was at a disadvantage in the confrontation between 3G and China Unicom, and the growth rate was obviously slowed down. It was time to first update the technology and look for new growth points.

Terminal: Dingxun Communications believes that the development of telecom operators must be strengthened by the “two legs” of platforms and terminals. Obviously, China Mobile is also doing so. Yesterday, China Mobile announced that its subsidiary has agreed to spend RMB 237 million to acquire China Mobile Dingxun Communications Co., Ltd. (“Dingxun Communications”) for the purpose of promoting China Mobile’s terminal equipment distribution and retail business.

It is understood that in 2004, China Mobile Group, ZTE Corporation, Eastern Communications, Beijing Digital China, and Huawei Investment jointly established Dingxun Communications, with a registered capital of 200 million yuan, which is mainly engaged in the sale of mobile phone terminal equipment. Prior to the transfer of shares, China Mobile Group held 29%, ZTE held 16%, Eastern Communications held 15%, Beijing Digital held 15%, Ningbo Bird held 15%, and Huawei Investment held 10%.

Lü Mouzhen said that China Mobile’s equity does not have an absolute advantage in Dingxun’s communications, which led to China Mobile’s inability to completely dominate the operation of Dingxun. Both China Unicom and China Telecom have their own wholly-owned terminal subsidiaries, namely Unicom Huasheng and Tianyi Telecom Terminal Company. Judging from the alliance between China Unicom and Apple, Unicom Huasheng, its terminal subsidiary, plays an important role in it and has a great influence on the overall management level of operators.

As of the end of January, China Unicom's 3G subscribers were 15.467 million and China Telecom 13.64 million. On January 31, China Unicom announced that it expects its net profit to decline by more than 50% in 2010.

“China Mobile will have a wholly-owned terminal subsidiary in the future, which will help strengthen its control and master the dominance of terminal product purchase rights.” Ms. Lu believes that it is difficult to say whether China Mobile can rely on the above actions to promote performance growth because it needs to include The stability of the network, the search for suitable cooperative products, and the user's sense of identity are all compatible with each other, but the direction of "walking on both legs" is beyond doubt.