Faced with slowing growth, operators need to change their roles

The past year was the "golden period" for the growth of 5G users. The market has not yet reached saturation, and there is a lot of room for growth. However, the three major operators recently released their operating data for December 2021. The number of new users and revenue were not optimistic compared with previous data, showing signs of weak growth. The data showed that China Mobile's net increase in users was only 109,000, China Telecom's net increase in users was 490,000, and China Unicom's mobile billing users decreased by 225,000.

Although the number of users is a rigid indicator for measuring the scale of operators' traditional business, another form of "scale" is also challenging operators during digital transformation. In the "arena" of digital transformation, how operators position themselves and how they expand new value areas to achieve leapfrog growth in business scale are the issues they need to focus on at present.

The traditional "pipeline" communications market has reached a highly saturated state. If we ignore the market share of the three major operators and instead view the market as a whole, it may not be easy to see major changes.

If we take the operators as an isolated observation object, many of their cases are not considered successful in terms of digital service innovation and transformation product attempts. In the booming cloud computing market, some telecom operators have lost their strategic dominance in the traditional hierarchy due to the deployment of cloud architecture; in the digital product market for end users, the services provided by telecom operators are subject to user experience, ease of payment and even platform neutrality; even in the enterprise and industry information market, which is growing at an astonishing rate, operators are also facing the danger of being "piped" due to insufficient industry experience accumulation.

We believe that if operators hope to play a greater role in digital services, they should pay special attention to the positioning of "Digital Business Enabler" and reasonably interpret this positioning through specific measures. In other words, operators should break away from the limitations of the industry, use a more open mind, abandon the obsession of being the "leading force of informatization", and take helping all parties to give full play to their informatization capabilities as an important task, and obtain their own interests through the improvement of the overall informatization level of the industry and the service management level.

To give an example that may not be accurate, in the past, when operators provided digital services, they put themselves in the position of CEO: deeply understand the business, build a technical platform, achieve customer acquisition, complete the service closed loop, mobilize various forces within the organization to develop products, and also take into account the upgrading of technology and products. In this process, because they pay more attention to "information flow" and become the coordinator of overall resources, the needs of "business flow" and "capital flow" may be underestimated or ignored - this will bring a major risk of service failure. As a "digital business enabler", operators should put themselves in the role of CIO and play a role through the externality of information systems. In other words, business planning, product form, and service measures are all completed by professionals through an open platform. Operators can achieve various businesses efficiently and with high quality by leveraging big data capabilities (reliable and flexible data computing and storage), network capabilities (fast and reliable information processing and transmission), and business support capabilities (adapting to rapid business adjustments and supporting promotions).

In this model, the two focuses of "business and information" are given equal attention, while risks are controlled to a certain extent. This example may explain to some extent why the various "smart" projects carried out by operators in previous years ultimately failed to meet expectations, but these projects are still being promoted by different entities. After several years of trial and hard work, operators have actually acquired strong resource integration capabilities, and the concept of "enabling" is also constantly strengthening.

However, the following keywords are still worthy of operators' focus during the transformation period: openness (jointly discovering and creating new value through open cooperation), dynamic adjustment (insight into the market, and the development of capabilities should be based on demand), and agile change (agile operations).

In particular, with the maturity of cloud services, cloud-network integration, and information value-added services, operators can find more opportunities for expansion in the industry. Although the "scale" of traditional business areas is no longer so easy to expand, operators can still find a lot of opportunities in the tide of digital services. However, this requires operators to jump out of a relatively closed system, make good use of the externalities of information services, explore how to act as "digital business enablers", and gain rewards in the common progress with society. This is the "new scale" that the digital transformation of the economy and society has given to the communications market.