After 2G network withdrawal, the results began to show

After a short period of stagnation, telecom business revenue finally showed an upward growth trend in October this year. Although we are not sure whether this momentum can be maintained for a long time, this upward growth itself is very hard-won in the context of the repeated outbreaks of the COVID-19 pandemic and the complex and changing macroeconomic environment. Among the various favorable factors that have brought about the growth of telecom business revenue, the withdrawal of 2G networks is definitely worthy of everyone's attention.

1. Mobile Internet User Penetration Rate Reaches a New High

Data from the Ministry of Industry and Information Technology show that by the end of October, the three basic telecommunications companies had developed 1.347 billion mobile Internet users, with a penetration rate of 84.1% among mobile phone users, up 1.9 percentage points from the end of last year. So far, the penetration rate of mobile Internet users has reached a new high.

If we look at it over a longer period of time, we will clearly see that the penetration rate of mobile Internet users has long hovered between 81% and 83%, and the probability of exceeding 83% in a month is not very high. The data released by the Ministry of Industry and Information Technology clearly shows this feature.

As the scale of mobile phone users continues to grow, the penetration rate of mobile Internet users has also increased simultaneously. This is due to both the fact that new users directly become mobile Internet users and the fact that after 2G networks are withdrawn, a large number of 2G users are forced to migrate to 4G users.

This conclusion can be inferred from the growth of mobile phone users. According to the data from the Ministry of Industry and Information Technology, as of the end of October, the total number of mobile phone users of the three basic telecommunications companies reached 1.6 billion, a year-on-year increase of 0.1%, an increase of about 11 million users, and the number of mobile Internet users increased by nearly 40 million during the same period.

2. User DOU value hits a new high

Data released by the Ministry of Industry and Information Technology showed that mobile Internet traffic reached 127 billion GB, up 27.6% year-on-year. In October, the average mobile Internet access traffic per household (DOU) reached 11.46 GB/household, a record high, 2.87 GB/household higher than the average in December last year and 1.19 GB/household higher than this year.

In fact, since May this year, DOU has shown an obvious upward growth trend, with the exception of a brief correction in some months, and has continued to hit new historical highs. It should be said that it is not easy for mobile Internet traffic to continue to hit new highs when home broadband and various commercial WIFI alternatives are becoming more and more important.

The user DOU can maintain the current growth rate, which is driven by the growth of traffic usage of existing Internet users and the growth of traffic consumption brought by the growth of mobile Internet users. Objectively speaking, the latter has a greater driving effect. After all, the Internet time of existing users is already limited.

Data released by operators have long shown that the DOU of China Unicom and China Telecom users is higher than the industry average. One of the reasons for this is that 2G users have voluntarily or are forced to migrate to 4G networks. Since the beginning of this year, China Unicom has increased its efforts to withdraw from the 2G network, which is actually very important.

3. The growth trend of traffic volume may change

Since last year, the year-on-year growth rate of traffic business volume has been on a long-term downward trend. Although there is still overall growth, the growth rate is getting smaller and smaller. This trend, coupled with the impact of the epidemic at the beginning of the year, showed a cliff-like trend change in February, and it was not until October this year that the momentum of reversal appeared.

The reason why the traffic volume can grow against the trend is naturally due to the growth of mobile Internet users and the growth of mobile Internet user penetration. The ultimate reason is that a large number of non-mobile Internet users have become mobile Internet users after the withdrawal of 2G network.

According to this logic, after China Mobile launches 2G network services on a large scale in the future, even without the impact of 5G network factors, it will also support a new round of significant growth in traffic. After all, the scale of China Mobile's existing 2G network far exceeds that of China Unicom and China Telecom combined.

4. The impact of 5G networks will become increasingly evident

As the construction of 5G networks continues to accelerate, my country's 5G network coverage is getting stronger and stronger, and the scale of 5G package users and 5G users is also growing rapidly. It should be said that under the influence of the substantial growth of 5G traffic, traffic usage will show a significant growth change in the future.

The current 5G package prices have exceeded the purchasing power of most ordinary users. In the future, although 5G networks are becoming more popular, the prices of 5G packages will inevitably rise first and then fall, just like in the 4G era. Over time, the combined factors of 5G user growth and package price reduction will inevitably drive data usage to a new high.

As 5G has become a consensus of the whole society, accelerating the withdrawal of 2G networks is not only the direct impact of the wave of communication technology, but also a realistic consideration for operators who are overwhelmed. The faster the 5G network is built, the greater the pressure on operators to launch 2G services. After all, the ability to maintain four networks requires huge resource expenditures.

China Unicom has withdrawn from 2G services nationwide, and China Telecom is also accelerating the pace of 2G withdrawal. Currently, only China Mobile is still sparing no effort to maintain 2G operations. Regardless of the practical considerations, it must be said that in the face of technological progress, whether it is a company or an individual, keeping pace with the times is a wiser choice.