Main issues with 4G base stations

Signs of price war

“It’s just a joke to find out that the house is mobile when you wake up after sleeping.” Recently, the ridicule about mobile 4G tariffs has also been criticized by Zhong Tianhua Mention it proactively.

Zhong Tianhua said that after 4G was commercialized across the province, Guangdong Mobile lowered the minimum consumption threshold for 4G from 128 yuan to 58 yuan. The newly added two-tier 4G tariff packages of 58 yuan/88 yuan provide users with 50 and 200 domestic calling minutes and 760M and 1100M traffic per month respectively.

This is China Mobile’s response to previous concerns about the high threshold for its 4G tariffs. It also means that 4G will quickly enter the mass consumer market in less than a few months.

China Mobile’s rapid lowering of tariff thresholds is not attributable to the power of the jokes mentioned above, but rather to the 4G competition among operators. As Minister of Industry and Information Technology Miao Wei previously said, "Currently, 4G tariffs are indeed high. Telecom operators are urged to consider the public's expectations. Ultimately, we must encourage competition and allow operators to lower 4G tariffs."

Recently, a China Unicom 4G promotional poster circulated on the Internet. The biggest highlight is "20 yuan includes 2G traffic." Although China Unicom's 4G strategy will not be officially announced until March 18, the industry speculates that China Unicom will not rule out making a fuss about price. Lu Yimin, general manager of China Unicom, recently expressed his views on 4G: "China Unicom must make it affordable and useful for everyone. 4G will not be a luxury that everyone cannot afford."

Although At present, Guangdong Mobile is only adding low-priced packages and has not really reduced 4G tariff levels. However, after the three major operators start to compete in the 4G market in the future, price war will undoubtedly be one of the most important means of competition.

Judging from the 4G operations in Japan, the United States and other countries, compared with 3G, 4G cannot effectively increase the ARPU value of operators, and it has no effect on the "de-piping" that operators hope to achieve. Too big an effect.

The development of Hong Kong’s 4G market also proves this point. A reporter from 21st Century Business Herald went to Hong Kong in August 2012 to test the local 4G network coverage. At that time, four operators in Hong Kong had already launched 4G LTE networks, and another operator, SmarTone, was about to join the competition. But for operators, although they have increased network speeds by 7-10 times, it is difficult to obtain more revenue from consumers.

“From 3G to 4G, network speeds have increased many times, but operators have no way to receive more money.” Deng Zhenliang, editor-in-chief of the monthly magazine "IT Telecom Market", told reporters at the time that several operators The situations encountered by businessmen are very similar. In other words, when telecom operators are anxious about becoming pipelines in the 3G era, the speed at which they are pipelined in the LTE era may further accelerate.

However, for China's three major operators, whose 3G is still in the payback period, the competition for 4G will inevitably mean a new round of large-scale investment competition, and it is directly linked to the 4G network. return on investment.

One detail worth noting is that Guangdong Mobile boasts that the scale of 4G website construction in one year will reach 2G in ten years. On the one hand, this reflects its urgency to launch 4G. On the other hand, it also implies that because the 4G network uses In high-frequency bands, in order to achieve the same coverage level, a larger number of base stations must be built. This will push up operators' network construction costs.

The "pipeline" embarrassment that operators have become more prominent in the 4G era is that higher and higher network speeds are likely to bring more powerful external OTT opponents to them.