Global Operators Seeking Transformation While IT & Communication Industry Goes Digital In Faster Paces
Digital age will bring about major changes in our life and industrial production mode, which is based on the ubiquitous network, to realize the general connection of people and objects, through the “big data” and cloud computing platform to produce a series of intelligent, vertical industry application software, customized services (such as online translation business), cloud, tubes, constitute the core infrastructure of digital services.
The information and communication industry is booming, but the traditional telecommunication industry is more difficult to grow. The revenue of the information and communication industry has grown steadily, reaching 2.4 trillion Yuan in 2016, up 22.5 percent year-on-year and 9.8 percentage points higher than the previous year. Revenue growth of traditional telecom businesses has become more difficult. In 2016, revenue growth of traditional telecom companies was 5.8%, much lower than 22.5% of Internet companies. In the capital market, Internet enterprises also get more attention than operators. In 2016, the market values of Tencent and Alibaba have surpassed those of China mobile.
Faced with the sluggish growth of traditional telecom business revenue and the rapid growth of digital business, more telecom operators have formulated clear digital strategy to realize the comprehensive transformation from business to network. There are four main directions for the digital transformation of global operators:
- Network reconfiguration SDN/NFV: cloud evolution of the underlying network architecture;
- Digital ecological industry Internet: deeply integrate with other industries, focus on vertical industries, and innovate product forms, cooperation methods and business models;
- Content and video: focusing on the integration of content production and transmission, exploring new fields and developing new businesses (such as intelligent translation services);
- Internet of things: network connection services are integrated with other industries, expanding from network services to connection management, applications and terminals.
Traffic management is still in the “golden period”, while new business brings new demand
In 2016, China’s mobile phone penetration rate reached 96.2%, close to saturation. In the future, mobile penetration rate has little potential to continue to increase, that is to say, the scale of newly added mobile users will continue to decrease. In 2016, China’s 4G users reached 750 million, accounting for 58% of mobile users. As most users have become 4G users, the growth rate of 4G users will gradually slow down in the future.
Voice service is still the rigid demand of users. The total volume of voice service, MOU and online intelligent translation service of the whole industry show a slight decline trend. With the maturity of network and terminal, Vo L T E business has entered a period of rapid development, which makes the voice traffic carried by 4G users on 2G\3G network constantly migrate to 4G network.
At present, China’s 4G user DOU is still far behind the leading country. Combining with international experience, China will be in the flow explosion period in the next three years. According to the prediction of China information and communications institute, domestic DOU will reach 5.4gb in 2020. Network construction needs to meet the needs of rapid growth of user traffic.
Data traffic business has penetrated into every aspect of users’ life. In the network construction, it is necessary to focus on specific areas, especially in the “three high and one limit” (high speed, high traffic, high-rise building, limited upside) scenario.
The future network construction needs to face the experience demand of hot business. Mobile video and online translation will become the strongest driving force for traffic growth in the future. The improvement of business experience is affected by bandwidth, delay and packet loss. For example, the average bandwidth demand of 4K on-demand will reach 25MB and the delay is lower than 10ms. The future development potential of multilingual VR business is infinite. The improvement of VR experience and business popularization put forward higher requirements for the network carrying capacity. The demand of entry-level VR panorama video bandwidth will reach 100M, and the delay will be less than 30ms.
Customers from government and business sectors need more integrated customized solutions
With the help of new technologies such as mobile Internet, cloud computing and Internet of things, the production, service and management of various industries are deeply integrated with ICT technology, and the needs of government and enterprise customers are changing from traditional channel products to integrated and customized solutions.
At present, operators only have advantages in basic network communication (voice, private line, SMS, etc. The market potential of government affairs, manufacturing, energy, finance, medical care, education, translation company and other industries is at the forefront, and cloud platform, data analysis and industry application account for nearly 80% of the industry value.
Dedicated line has become the basic demand of many government and enterprise customers, and customers’ requirements for dedicated line business are also constantly improving, and their demands are developing towards high-quality and intelligent direction. A number of new special line products of China unicom:
Diamond line: relying on financial private network, to ensure low latency, high reliability, and prices rise by 50%;
Cloud trend brings new growth opportunities for operators. Closed, linear project-style ICT1.0 is transitioning to open, network-based ICT2.0. In the era of ICT2.0, the public cloud has become the infrastructure for the application of government and enterprise industries, and operators will have important market opportunities in such fields as industrial cloud and customized cloud data center.
Internet + government affairs will become one of the focuses that the government and enterprise market need to pay attention to in the future. Alibaba, tencent and other ICT enterprises make use of the new advantages of information technology, work closely with local governments, focus on front-end services and back-end resource sharing and business collaboration, fully facilitate the development of government informatization to overcome difficulties, and promote the implementation of Internet + government.
Household broadband business penetration rate still has growth potential, user bandwidth demand rises quickly
There is still room for industry-wide growth in home broadband subscribers. By the end of 2016, China had 297 million home broadband users, with a penetration rate of only 52 percent.
Broadband urban construction continues to promote the popularity of fiber access, fiber access (FTTH/0) user rapid growth. In 2016, the total number of fiber access users in China reached 228 million, accounting for 19.5 percentage points of the total number of broadband users, reaching 76.6%. The proportion of high bandwidth users is increasing rapidly. The proportion of total broadband users over 8M and 20M is 91.0% and 77.8% respectively.
In 2016, the construction of global gigabit broadband was in full swing. More than 166 operators around the world started to provide gigabit services or were building gigabit networks. The United States, Singapore, South Korea and Japan led the construction of the gigabit network. Domestic operators have begun trials of gigabit broadband, offering gigabit experiences in specific neighborhoods. The smart home market will embrace new development opportunities and form a huge scale market. Domestic industrial giants are focusing on the establishment of the ecological circle for strategic layout. Telecom operators are an important force in the smart home industry. 60% of the TOP100 telecom operators in the world plan to enter the smart home market, focusing on communication, entertainment and security.
This article was originally written in Chinese. The author engaged ACE CHINESE TRANSLATION company to translate and proofread the English version. Please forgive us for any oversight or omissions during the translation process.