Operators' internal meeting again discussed how to compete, saying no price wars and no market disruption

Recently, at an internal leadership meeting of operators, an insider exclusively revealed to the Operator Finance Network that the operators again discussed how to compete at the meeting and also said that they should no longer engage in price wars and should not disrupt the market.

The communications industry is deeply affected by price wars

In recent years, the three major operators have been caught in a fierce price war. From the 3G to the 4G era, after several rounds of price competition, the overall communication charges have dropped by more than 90%. The three operators are facing a state of stagnant and declining revenue.

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Especially in the 4G era, the "unlimited" packages blindly use lower prices and more preferential policies to attract users. However, behind this, the operators' profits have declined for the first time. The dilemma of increasing revenue but not profits has become more serious, which has seriously damaged the healthy development of the communications industry market.

In fact, price competition is the lowest level of competition. The result is that prices become lower and lower, products become worse and worse, and eventually a vicious cycle is formed, affecting the sustainable development of the industry.

Operators say no price wars, no market disruption

Now that the growth of domestic communication users has reached its ceiling, the top management of the three major operators has deeply realized the disadvantages of price wars and has resolutely stopped selling "unlimited" packages. They are consciously developing the market in a protective manner rather than destroying it in a destructive way.

At the same time, we will strengthen competition in services, win users and markets through good products and services, make consumers willing to pay a premium for services, and then turn the premium into profit.

In addition, since the number of users can no longer grow, operators have proposed to increase the ARPU value of old users, that is, the revenue contributed by users each month, that is, to fight a value war rather than a price war.

Among them, China Telecom's performance was particularly prominent. Its 5G business continued to drive the growth of mobile user value, and its mobile business ARPU stabilized and rebounded compared with the second half of last year.

In the first half of 2020, China Telecom's mobile business ARPU was 44.4 yuan, up 0.5 percentage points from 44.2 yuan in the second half of 2019, achieving a month-on-month increase.

Although China Unicom lost 8.95 million mobile users in the first half of 2020, the ARPU of mobile users also increased month-on-month, from 40.1 yuan in the fourth quarter of 2019 to 41.8 yuan in the second quarter of 2020.

The same is true for China Mobile. Its 2019 financial report showed that the ARPU of its mobile business was 49.1 yuan, which increased to 50.3 yuan in the first half of 2020.