Operators are killed by mobile internet

Analysts pointed out that on the one hand, the traditional business is declining, and on the other hand, passive investment is needed. The final result is that the relationship between operators and large mobile internet companies has become tense. Just how did you send your wishes? The data shows that technological innovation is changing the way people communicate and at the same time subverting the traditional operator business.

According to Hu Yanping, founder of DCCI Internet Data Center, from 2012's annual data, telecom operators' SMS volume decreased by 20% compared with last year, MMS volume decreased by 25%, and telephone traffic even fell by 5%.

Operator's business is "double killing" by mobile internet

Today, in the cities of Guangzhou, Shenzhen, and Shenzhen, the number of texting and MMS messages sent by young people is decreasing, and even the demand for telephone calls is decreasing. Apple's iMessage, Tencent's WeChat and mobile QQ, and other functions, make communication between friends more convenient and diverse. As a result, operators' voice and text messaging services have been slowing down.

According to the Ministry of Industry and Information Technology, as of November 2012, the length of mobile phone calls totaled 252.1 billion minutes, an increase of 12.8% over the same period of the previous year. The year-on-year increase in November 2011 was 16.4%, compared with 22.7% in November 2010.

The volume of mobile SMS services was increased by 2.3% compared with the same period of last year as of November 2012. In 2011, the increase was 6.4% from the previous year and 6.8% in 2010. The growth rate has dropped significantly.

Ma Jun, Chief Analyst of Fortune China Securities TMT, told the Securities Daily reporter that this is an inevitable trend.

“People now prefer to use free communication methods. This will certainly have an impact on operators’ traditional businesses.”

While investing huge sums of money to build 3G networks and develop smart terminals, the profits of operators are eroded by the new mobile Internet industry. Ma Jun pointed out that operators are being affected by two aspects: On the one hand, due to the rapid development of mobile Internet services, operators are under heavy pressure, forcing operators to continue to invest in network construction; at the same time, operators have Business continues to shrink.

"It can be said that the operator is a "double killing" effect. On the one hand, the decline in traditional business, on the other hand, passive investment. The final result is that the relationship between operators and large mobile Internet companies tends to be tense."

Nervous relationship between the two camps needs to explore a win-win approach

The increasingly superficial contradiction between the operator and Tencent is exactly the strain of the relationship between the two camps.

For OTT companies such as Tencent to accelerate the pipeline crisis of operators, Li Yue, President of China Mobile, and Lu Yimin, General Manager of China Unicom, have clearly stated that “WeChat has threatened the mainstream business of operators”.

At present, Tencent QQ occupies more than 40% of China Mobile's traffic, but its contribution to China Mobile's revenue does not exceed 10%. According to sources, Ma Huateng and Li Yue are negotiating. However, both are very strong. Tencent and China Mobile’s mobile Internet battle is inevitable.

Ma Jun said that this is not a unique phenomenon in China and it is the same in the world.

Former IDC Greater China President Guo Hao also said in his real name microblogging that it is not Tencent's problem of grabbing, but how fast the “market” habits change. There are two variables: the speed of technological innovation; the growth of the next generation of users.

In fact, the relationship between operators and Tencent is not only simple and threatening.

As the largest Internet company in China, hundreds of millions of users of Tencent products are also users of operators. It is based on Tencent's data products that it contributes a lot of data revenue for operators. Although, the growing data business does not fully compensate for shrinking voice and SMS revenue. However, no one can deny that the data service will be a crucial part of the operator's future profitability today when operators are being pipelined. Therefore, from this perspective, Tencent is the best partner for the operator's data business.

On the one hand, taboo Tencent influence in the mobile data era, its products such as WeChat more directly affect their own voice and SMS business income; the other hand, data services and inseparable from Tencent such Internet and mobile Internet giants. Is love, or hate, both ends of the game, indecisive, then, formed a scene of today's operator and Tencent love and hate.

In Ma Jun’s opinion, in order to resolve the contradiction between the two sides, on the one hand, operators must clarify their positioning and should operate with a better pipeline and intelligent business philosophy; on the other hand, they must increase business innovation. Strength and speed will make up for the loss of voice and text messaging services. In addition, the relationship between the two parties will be handled well. There will be a better solution for future cooperation fees and achieve a win-win situation.

In terms of self-rescue by operators, Guotai Junan Research reported that operators represented by Telefonica began to look for ways to develop OTT services. The integration of telecommunication networks and the Internet to design new data revenue channels is the core. Spain Telecom's total global revenue in 2011 was 62.837 billion Euros, an increase of 3.5% over the same period of last year. During the same period, Telefonica Digital was established in the second half of the year. Revenue accounted for about 5% of revenue, and 2012 revenue growth rate reached 20%, becoming a new business growth point. The key to the success of this business lies in the operator's combination of a private telecommunications network and the Internet, providing a wealth of data application services.