Why are operators competing to launch new 4G packages as 5G is the mainstream?

[[406115]]

In 2021, when 5G is rapidly popularized, operators have not "abandoned" 4G packages.

Recently, the three major operators have launched a number of new 4G package cards. Among them, China Telecom launched the "Filial Piety Card", China Mobile launched the "Mobile QQ Treasure Card", and China Unicom launched the "Wopai Youth Card".

Industry insiders believe that the launch of multiple new 4G packages by operators is intended to increase their presence in the mobile communications market. As there are still some 2G and 3G users in China, if operators can guide 2G and 3G users to upgrade through new 4G packages, it will help boost performance growth.

The three major operators focus on 4G market segments

Recently, the three major operators have all focused on deepening their presence in the 4G market segment.

China Telecom has launched an exclusive preferential rate for the "Filial Piety Card" suitable for elderly users. The card is only available to seniors aged 65 and above. The package includes 2GB of general traffic, 10GB of exclusive traffic covering some APPs, and 100 minutes of voice time. In addition to basic communication needs, a communication assistant can be activated for free to provide missed call reminders, intelligent identification of unfamiliar calls, and interception of fraudulent and harassing calls.

China Unicom has launched the "Wopai Youth Card" for young users. Among them, Shenzhen Unicom's Wopai Youth Card costs 39 yuan per month. The package includes 80 minutes of voice time, 100GB of domestic traffic, 40GB of provincial targeted traffic, and membership rights of platforms such as Youku, Tencent Video, NetEase Cloud Music, and JD.com.

The "QQ Treasure Card" launched by China Mobile and Tencent has a monthly rent of 19 yuan, with the first month free of charge and a traffic fee of 1 yuan/GB. The QQ Treasure Card includes a 30GB exclusive free-traffic monthly package. The free-traffic range includes more than 100 popular third-party apps such as Tencent, Baidu, Tik Tok, NetEase Games, and Alibaba. It is regarded by the outside world as the mobile version of the "Tencent King Card".

4G users still dominate the market

At present, the development of 5G package users in my country is rapid. According to the operating data report for April 2021 released by the three major operators, the scale of 5G package users has reached 420 million. However, compared with the total number of mobile users of the three major operators, which is as high as 1.605 billion, 4G users are still the mainstream. As of the end of April, the number of 4G users of China Mobile alone reached 790 million, accounting for nearly half. The scale of 4G users is still large, and the 4G market potential still exists. In this case, it is a more pragmatic choice for operators to continue to deepen the 4G market.

In fact, the existing 2G and 3G users in China need to upgrade their mobile phones and packages due to network reasons, which also brings opportunities for the expansion of the 4G market. Although 4G lags behind 5G in terms of network speed, it is cheaper. For middle-aged and elderly users, they pay more attention to price factors and prefer lower-priced 4G packages. If operators can launch cost-effective 4G packages, it will be very attractive.

Can balance the construction and operation costs of 5G networks

Just as the trend of 2G and 3G users quitting the network is inevitable, the transition from 4G to 5G in the future is also a law of development in the communications market. However, as of now, the real popularization of 5G cannot be achieved overnight. Zhang Yunyong, general manager of China Unicom's product center, said that it will take 5 to 8 years to fully realize 5G network coverage.

It is worth mentioning that 4G was only commercialized in China in 2014, and 5G was launched only five years later. Operators have not yet recovered their 4G investment, but they immediately upgraded to 5G. The investment pressure is self-evident.

In order to save 5G construction expenses, China Telecom and China Unicom jointly build and share 5G networks. Wang Xiaochu, chairman of China Unicom, once revealed that during the five-year 5G construction cycle, joint construction and sharing will save China Unicom and China Telecom 200 billion yuan in capital expenditures respectively.

With the pace of large-scale investment in 5G, the three major operators are stepping up the promotion of 5G packages. At the same time, launching a variety of new 4G packages will help ease the financial pressure and pave the way for these users to upgrade to 5G in the future. After all, 4G operators are very mature in business operations and have low operation and maintenance costs in the later stage. For many users, choosing a cost-effective 4G package is also a good choice.