With the rapid development of 5G, operators have drastically cut marketing expenses. How can agents survive?

Relying on a large number of agents, China Mobile in the 2G era not only developed a large number of users in a short period of time, but also quickly rose in the global rankings. This situation has been accompanied by the growth and expansion of the three major operators represented by China Mobile. Although the scale of mobile phone users has long exceeded the ceiling of population restrictions, agents have not disappeared. In the year of 5G development, facing the substantial reduction of marketing expenses by operators, what should agents do?

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1. Operators began to significantly reduce marketing expenses

From the annual financial reports that China Unicom and China Telecom have made public, it can be seen that the marketing expenses of these two operators have been significantly reduced. China Unicom's sales expenses were reduced from 33.54 billion yuan in 2019 to 30.46 billion yuan in 2020, a decrease of 10.03%, a reduction of 3 billion yuan.

The situation of China Telecom is similar to that of China Unicom. Public data shows that China Telecom's sales expenses in 2020 were 45.447 billion yuan, down 6.2% from 2019, a decrease of about 3 billion yuan. The reason given by China Telecom for the decline is that the company seized the opportunity of the development of Internet online business, accelerated the transformation of sales model, and strengthened online and offline collaboration.

China Mobile has not yet released its 2020 operating performance report, so we cannot know its specific marketing expenses. However, judging from the explanation given by China Telecom, China Mobile's marketing expenses are likely to be reduced. After all, the coordinated development of the Internet online and offline is everyone's common transformation goal.

From the above data, we can conclude that China Unicom and China Telecom alone reduced their marketing expenses by more than 6 billion yuan in 2020. China Mobile is much larger than China Unicom and China Telecom, and its estimated reduction should be around 5 billion yuan. In other words, the marketing expenses of the three major operators in 2020 decreased by more than 15 billion yuan.

2. Why do most agents not sell broadband services?

At present, the majority of agents of operators mainly deal in mobile phone number cards, recharge and payment services. From the perspective of operators, these services are short, flat and fast ultra-short process services; from the perspective of agents, short, flat and fast services take up less time and are simple to operate, and are easy to make money.

As the scale of mobile phone users has exceeded the ceiling of the total population size, although operators still have a small amount of growth and agents can also sell other mobile phone services on behalf of others, the remaining room for development of the mobile phone business is very limited from the perspective of both penetration rate and popularity rate.

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It should be said that in recent years, operators represented by China Mobile have been working hard to develop broadband business. Some people say that agents can completely transform into selling broadband. However, it is easy to say but very difficult to do. One of the main reasons is that broadband is a long-term business, which requires manual coordination before, during and after sales.

Another very important point is that the broadband development model of operators mainly relies on enclosure agents. That is to say, after the broadband network completes the coverage of a specific community, the pre-sales, in-sales and after-sales of this community will be entrusted to a specific third-party company for specific docking, which means that ordinary agents are simply not capable of undertaking this kind of business.

3. Can agents benefit from 5G?

2021 is a year of great development for 5G. The four major operators, including China Radio and Television, are scrambling to seize the high ground of 5G development. In the process of 5G development, although the individual user market only accounts for about 20% of the total 5G share, it is the first focus. In the process of promoting the migration of 4G users to 5G, agents can benefit.

As for the agents' concern about whether they can get the meat of 5G in addition to the soup, we think this is still possible, but the difficulty is also quite large. The focus of 5G application is on the government and enterprise market. Whether they can obtain cooperation opportunities from government and enterprise manufacturers will be the key for agents to get the meat of 5G.

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5G information technology projects are generally large-investment projects, and the agency fees are naturally considerable, but who has the ability to obtain such projects? This issue not only tests the agent's promotion ability, but also tests the agent's comprehensive social activities ability. After all, snatching food from the tiger's mouth is never as easy as blowing the wind.

The business model of operators cannot go back to the past, and the agency model of agents also needs to change with the changing situation. With the opportunity of online and offline integration and the rapid development of 5G, agents now need to change their thinking and upgrade their hardware before studying strategies to make more money from operators. This may be more practical.