Competition in the fixed broadband market enters the "second half"

China Telecom leads strongly, China Mobile overtakes China Unicom

The three operators recently released their main operating data for October this year, revealing that the domestic fixed-line broadband market has undergone a major change. China Mobile has "usurped" the second place in the broadband market that China Unicom has long held. Data shows that by the end of October this year, China Mobile's number of wired broadband users reached 75.51 million, surpassing China Unicom, which had 75.472 million wired broadband users. Moreover, judging from the average monthly growth rate of both parties, the gap between China Mobile and China Unicom in the number of broadband users will continue to widen.

China Telecom, which has always occupied the first position in the domestic broadband market, had a total of 121.57 million broadband users by the end of October, far ahead of its competitors. Moreover, compared with the past two years, China Telecom's fixed-line broadband business has shown a very strong growth momentum this year.

If the competition in the fixed-line broadband market is compared to a football game, the period before October this year was the first half, with China Telecom and China Unicom being the "stars of the field". Starting from October, the market entered the "second half", with a "Three Kingdoms" situation, and the market competition will become more intense.

China Mobile and China Unicom "swap positions"

When releasing its 2015 annual report, China Mobile announced for the first time the number of its wired broadband users, which totaled 55 million, which surprised the outside world. In many people's impressions, China Mobile is strong in mobile business and only plays a supporting role in the broadband market. Unexpectedly, after "quiet" development, China Mobile has become a "giant" in the broadband market, and the gap between it and China Unicom is not big. At the end of 2015, China Unicom had 72.33 million wired broadband users, only 17.33 million more than China Mobile.

In 2016, China Mobile continued to make aggressive advances in the broadband market with its low-price advantage, and the gap between it and China Unicom continued to narrow.

At the end of the first quarter of 2016, the number of China Mobile's wired broadband users reached 60.585 million, 12.825 million fewer than China Unicom. By the end of the second quarter, the gap had narrowed to 8.1 million, and by the end of the third quarter, the gap had narrowed rapidly to 810,000.

According to the data from the first nine months, China Unicom added an average of 300,000 wired broadband users per month, while China Mobile added an average of 2.13 million users per month. At this rate of growth, China Mobile will surpass China Unicom in terms of wired broadband users by October, and this is indeed the case. Although China Mobile only added 1.269 million wired broadband users in October, which is lower than the average level in the first ten months of this year, it is still far more than China Unicom's 422,000 new users in October, thus surpassing China Unicom in one fell swoop.

Telecom still has a huge leading advantage

In the wired broadband market, China Telecom still has a huge lead, with more than 46 million users than China Mobile. Moreover, judging from the development in the first ten months of this year, China Telecom's wired broadband business is developing well.

In the first ten months of this year, China Telecom has accumulated a net increase of 8.51 million wired broadband users, with an average monthly increase of 851,000. In 2015, China Telecom added 6.11 million wired broadband users, with an average monthly increase of 509,000. In 2014, the net increase was 6.85 million, with an average monthly increase of 570,000. In fact, the net increase of wired broadband users in the first eight months of 2016 exceeded the figure for the whole of last year. From the comparison of figures, it can be seen that compared with the past two years, the development of China Telecom's wired broadband business this year has shown a very obvious growth trend.

What is particularly noteworthy is China Telecom's development in fiber-optic broadband business. When formulating its work priorities for 2016 at the end of last year, China Telecom established "4G+" and "optical broadband" as its two core businesses. By the end of September this year, China Telecom's FTTH users reached 97.68 million, accounting for about 81%, ranking first in the world.

According to China Telecom's plan, by the end of this year, the country's optical network will have 100% coverage, and the average access rate of wired broadband will reach 35Mbps, an increase of nearly 38% over last year.

China Telecom's efforts in optical networks will further consolidate its leading position in broadband business.

Market competition will be more intense next year

There is no doubt that competition in the wired broadband market will be more intense in 2017. Moreover, the strategies of the three operators seem to be different at present.

China Unicom, which has fallen behind in the broadband market competition, will rely more on the strength of its partners in the development of broadband business than ever before, as its main energy and resources are currently devoted to 4G network construction and business development. Previously, China Unicom has formed a strategic partnership with Shangpeng, the largest private broadband company in China. The two parties not only have in-depth cooperation in mobile resale business, but also have far exceeded the traditional form of cooperation in fixed-line broadband. The specific cooperation is to carry out cooperative operations in the field of home broadband business in the areas negotiated by both parties, jointly develop and build a business operation support system for users confirmed by both parties, and realize peer-to-peer interconnection of the two networks.

China Mobile will continue to stick to the low-price route. For users who have not experienced the broadband quality of different operators, they are easily attracted by the low-price tariffs. However, in the future, the competition in the broadband market will mainly focus on existing users. More users will not only consider price factors, but also broadband quality. For China Mobile, which is taking the low-price route, the competitive pressure it faces will become increasingly greater.

China Telecom, which is a big step ahead in optical network coverage, will continue to improve broadband speed and quality to further enhance its attractiveness to users. China Telecom has now launched gigabit broadband services in many provinces and cities in China, further improving its Internet bandwidth and broadband quality, which is its core competitiveness.