China Mobile slams on the brakes. What is the reason?

Recently, the three major operators represented by China Mobile have released their February operating reports. Data shows that the growth of China Mobile's 5G package users has shown a clear and continuous slowdown, and even some communications industry analysts have begun to predict China Mobile's decline. Although all players are working hard to develop 5G package users, what is the reason for China Mobile's sudden brake?

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1. Public data shows that China Mobile slammed on the brakes

In the first two months of 2021, China Mobile's 5G package users increased by 3.968 million and 4.197 million respectively, totaling 8.165 million. If we make a vertical comparison, we can clearly see that the number of developments in the first two months of 2021 is far lower than the number of developments in a single month in the second half of 2020.

In addition to being far lower than the monthly growth in the second half of last year, China Mobile's 5G package user growth in the first two months of 2021 is not only far lower than China Telecom, but also much lower than China Unicom, which ranks third. Some communications industry analysts even use China Unicom's successful turnaround to describe China Unicom's sudden rise.

Although China Mobile still has the obvious advantage of the largest number of 5G package users, the sudden brake of China Mobile in this year of 5G development has indeed left many users who care about and support China Mobile confused. Is China Mobile deliberately slowing down, or is there another reason?

2. China Mobile's scale advantage begins to shrink

As of the end of February this year, China Mobile had 173 million 5G package users, which is much higher than China Unicom and China Telecom, but its market share is already less than 50%, which is lower than its mobile phone user market share and is obviously inconsistent with its position as a leading operator. Although this is a hidden concern, it is not the main problem at present.

In terms of 5G package penetration, China Telecom has exceeded 29%, China Unicom is close to 27%, and China Mobile is less than 19%. From 5G network to 5G package, from 5G package to 5G terminal, and finally to become a real 5G user. In this highly correlated rolling development business chain, 5G package is an important node to promote user migration to 5G.

The reason why the three major operators are pushing for the expansion of 5G package users is essentially to focus on the key links in the 5G user development business chain. At present, the penetration rate of 5G package users in my country has exceeded 22.6%. Except for China Mobile, China Unicom and China Telecom have already started to lead in various ways. However, in addition to package penetration rate, 5G terminal penetration rate is more critical.

3. China Mobile leads the way in terms of the number of real 5G users

Data released by the China Academy of Information and Communications Technology showed that as of the end of 2020, there were 163 million 5G terminals in my country. During the same period, official data released by China Mobile showed that there were 110 million 5G terminals in the network. In other words, the scale of 5G terminals in the network of China Unicom and China Telecom is about 53 million.

China Unicom and China Telecom have about 53 million 5G terminals online. Compared with the 150 million or so 5G package users of China Unicom and China Telecom, the gap between their real 5G user scale and China Mobile's real 5G user scale is even greater.

Although the relevant data in the above table is as of the end of 2021, the problem reflected by this data is actually very serious. That is, although operators have developed a large number of 5G package users, a considerable number of them are suspected of being deceived. After all, they only use 4G terminals and cannot enjoy 5G network services.

4. 5G user development needs to be steady and steady

In response to the issue that 5G terminals have become a major obstacle to the development of 5G, the regulators have actually put forward new regulatory requirements at the beginning of this year. The three major operators, especially China Mobile, have clarified the configuration requirements for 5G terminals and recently publicly purchased 3.3 million Xiaomi 5G mobile phones to promote the migration of 4G users to 5G users.

Regarding 5G service issues, the regulator pointed out that some companies, while pursuing economic benefits, have not paid enough attention to user perception, that there are weak links in the management mechanism of grassroots companies, and that the comprehensive service capabilities have not kept up with the pace of development, requiring companies to continuously improve 5G service levels. After all, a large number of 4G terminal users have paid for 5G packages, but they still enjoy 4G network services.

Under the background of regulatory requirements to improve the quality of 5G services, China Mobile's 5G package users have slowed down significantly for two consecutive months. Many people are not sure whether this is a necessary action for China Mobile to actively improve services, or whether there are problems with the execution at all levels that have led to the slowdown in the development of 5G package users. Although we do not have a clear answer at present, judging from the strong execution of China Mobile's entire group, China Mobile is no longer satisfied with pursuing the expansion of the package user scale, but is more focused on developing real 5G users. I hope our analysis can give you some inspiration.