What impact does China Unicom's “change speed reduction” have on the industry?

Electronic enthusiasts eight o'clock in the morning: As a benchmark for the reform of the ownership system of the central enterprises as a whole, China Unicom's share reform plan, after the announcement of the joint venture, whether it is the communications industry, related industries, and the investment community, are extremely concerned. It is foreseeable that although there will be some fine-tuning with the published plan, although the actual operation stage is entered, the overall plan will not undergo major adjustments. Therefore, in the research and analysis of China Unicom's mixed reforms, there are many cuts in various angles. In this article, we will discuss the key issues of several industries such as “speed-up and fee reduction” for China Unicom's mixed reform, for your reference, and welcome criticism. Below, individuals analyze the potential impact on the telecommunications industry from five perspectives:

In the first half of 2017, the total number of China Mobile customers was 867 million, a net increase of 17.61 million. In the first half of 2017, the net increase of 4G customers was 58.62 million, with a total of 594 million and 4G penetration rate of 69%. The scale of cable broadband business customers has maintained accelerated growth. The number of cable broadband customers increased by 15.42 million to 93.04 million. It is expected that the number of cable broadband customers will exceed 100 million by the end of the year. Broadband revenue reached RMB 17.9 billion, an increase of 49.8% year-on-year.

From the data point of view, the entire telecom industry presents a fundamentally competitive landscape of China Mobile. Therefore, China Unicom's mixed reforms can have a strong agitation effect on China Mobile's one-size-fits-all competition pattern, which may be a concern. Judging from the analysis content that I have seen so far, most of them are still skeptical. However, from the expectations of China Unicom's mixed reforms, if we can't break the current pattern, the role of mixed reform will not be exerted. In other words, whether it can break the existing basic competition pattern will become an indicator for evaluating the effect of China Unicom's mixed reform. Otherwise, by then, China Unicom's value base in the field of basic telecommunications services is still not reliable, and the growth of performance can only rely on innovative business, which seems even more difficult! Therefore, promote existing competition through both market and non-market means. Changes in the pattern are more likely. This change in competition pattern is mainly carried out in the era of 5G networks.

According to the statistics of the State-owned Assets Supervision and Administration Commission, since the General Office of the State Council issued the “Guiding Opinions on Accelerating the Discovery of High-Speed ​​Broadband Network Construction and Promoting Network Speed-Up and Reducing Fees” in May 2015, more than two years have been making a profit to customers while increasing the speed of the network. More than 120 billion yuan, in the first half of 2017, the profit was 11.7 billion yuan. This kind of profit is not big or big, and each has its own views. But from the absolute amount of the profit, it is indeed real.

From the comparison of the profit-making data in the first half of 2017, the individual thinks that the speed and cost reduction will be carried out in the short term, especially the possibility and space for the reduction of fees are decreasing, especially since this year, based on the unlimited flow package. Competition has pushed industry competition to a state where all parties may have been exhausted.

Therefore, although the senior leaders have been talking about speeding up their fees when they inspect the three major operators recently, objectively, from the perspective of business operation efficiency, the ability to continue to reduce fees temporarily may require a buffer. Although users generally complain about the issue of tariffs, such complaints must also distinguish between emotional and rational.

When China Unicom promotes mixed reform, the independent pricing power of enterprises may not be interfered by excessively administrative means, and the policy requirements for speeding up and reducing fees may be adjusted. Unless China Unicom can significantly reduce the operating costs of enterprises and greatly improve the efficiency of enterprises, China Unicom will not have more capabilities to continue the price competition and vicious competition, which is unfavorable to the performance of the company. On the contrary, it may be another more sensible choice to increase the price of the service and even increase the price by partial differentiation. Some studies in other industries have shown that continuous price cuts are bound to require compression costs, and the result of compression costs is the quality of the product or the quality of the service. Therefore, individuals expect that when China Unicom's mixed-reform plan is officially implemented, industry competition, which is based on speed-up and fee reduction, especially the reduction of fees, may come to an end. Even if it is, it is based on market competition needs, not on policy requirements.

Previously, the rumors that China Unicom may merge with China Telecom appeared from time to time, which also became a hot concept of capital market speculation of China Unicom's stock price. However, with the announcement of China Unicom's inclusion of the mixed reform, there is no room for speculation about the concept of merger between China Telecom and China Unicom.

Despite this, since last year, the two companies have been working closely together on the channel and on the network, and then on the terminal competition of the entire Netcom, they can use the honeymoon to describe the relationship between the two.

After China Unicom's mixed reforms, the relationship between the two companies is worthy of attention. It is expected that the two companies will continue to cooperate against China Mobile, but whether they will continue to maintain the breadth and depth of cooperation, after all, the two are also competing. Moreover, with the announcement of China Unicom's employee stock ownership plan, the requirements for performance are still relatively demanding. Therefore, the competitive relationship with China Telecom will once again be highlighted.

In any case, for a central enterprise that has been mixed and reformed as a whole, the employee stock ownership plan is synchronized, and there are still many policy restrictions to break through. This breakthrough will be very effective in demonstrating the effect of employee stock ownership plans of other companies. Although it is unlikely that China Mobile and China Telecom will carry out the overall mixed reform, it will take at least five years to evaluate the effect of China Unicom's mixed reform. However, both China Mobile and China Telecom have a large number of second- and third-tier companies. Among these large companies, choosing the right mixed-ownership reform will be another test path for mixed-change.

With China Unicom's employee stock ownership plan, whether it is the proportional control of employee stock ownership or the setting of shareholding price, it is a good reference. It is believed that there will be more employee stock ownership plans in the future, which will further activate the vitality of the corporate team.

One of the undeniable objective problems in the operation of the three major operators is the personnel problem. Therefore, some analysis before the announcement of China Unicom's mixed-reform plan involves the issue of market-oriented employment mechanism. It is a real problem of direct correlation to improve the business operation effect, optimize the personnel structure, improve the work efficiency of personnel, and reduce staff and increase efficiency. China Unicom's employee stock ownership plan can not only stimulate a part of the core personnel, but also stimulate the role of those who are not able to enjoy the shareholding. These people, whether they choose to leave on their own initiative, or passively wait for China Unicom's compression level to adjust personnel when they leave, especially there are labor forms and other forms of employment.

Market-oriented employment methods, personnel can go up and down, can enter and exit, this is the common problem faced by the three major operators when they are employing people. China Unicom's implementation of the mixed-reform program, it is necessary to use more of the BATJ's Internet channels and management tools as shareholders, this efficiency will also reduce the demand for personnel. Therefore, China Unicom's measures, problems and safeguards in reducing staff and increasing efficiency will provide more experience for the other two.

In general, China Unicom's mixed reforms, in addition to the significant impact on the original state-owned enterprises' thinking and management systems, have a positive impact on the entire telecommunications industry. In particular, the impact on the changes in the industry's competitive landscape is personally considered to be primary.