The three major operators unprecedentedly unified unlimited packages and removed them from the shelves to save themselves

The business of the three major operators has been declining month by month since 2019. As of July 2019, the traffic revenue of operators was 355.6 billion yuan, but the year-on-year growth has turned into -0.2%. Starting this month, the three major operators simultaneously removed unlimited packages to save themselves.

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Unlimited packages are growing wildly

Since the launch of unlimited packages in 2017, this land-grabbing movement has led to a rapid growth in operators’ users and revenue.

By this year, the traffic revenue of operators has turned into negative growth. In addition, the unlimited packages have brought about massive resource consumption, which has overwhelmed the operators. The three major operators have moved in unison and started to save themselves.

The reason is the 100% increase in traffic

The main reason for reaching an unprecedented consensus is the pressure of business operations. According to the 44th "Statistical Report on the Development of China's Internet" released by the China Internet Information Center, as of the end of June, the average monthly mobile traffic used by users reached 7.2GB, and the mobile Internet access traffic consumption reached 55.39 billion GB, a year-on-year increase of 107.3%.

The three major operators made unprecedented adjustments

The three major operators reached an unprecedented consensus on the adjustment of unlimited data packages. China Telecom took the lead in implementing it in August, and China Mobile and China Unicom immediately announced the cancellation of unlimited data packages from September 1.

Changes in packages after cancelling unlimited usage

There are some changes after the cancellation of unlimited data, such as the first 40G is 4G traffic, and when the 4G traffic is used up, it will be reduced to 3G traffic, and 3G traffic is unlimited. However, compared with the 4G network, the peak rate of 3G is only about 400KB/s, while the actual speed of 4G network can generally reach about 3-4MB/s. After getting used to 4G, going back to 3G network, the network speed is just like a turtle crawling.

After the unlimited traffic package is cancelled, the original package is changed to: after the 4G traffic reaches the standard, the 4G traffic outside the package will be charged separately.

The three major operators are slightly different after the cancellation

• For China Mobile packages below 129 yuan, the excess traffic is charged 5 yuan/GB. For packages above 199 yuan, the excess traffic is charged 3 yuan/GB. If the excess traffic exceeds 600 yuan, the Internet service for that month will be suspended.
• China Unicom’s out-of-package data charges for packages above RMB 199 are RMB 3/GB, and out-of-package data charges for packages below RMB 199 are RMB 5/GB.
• China Telecom's out-of-data traffic charges for packages below 129 yuan are 5 yuan/GB, and for packages above 199 yuan, the out-of-data traffic charges are 3 yuan/GB.

User needs are also unified

In order to reverse the downward trend, the three major operators hope to cancel unlimited packages and let users pay for 4G traffic without reducing the speed, thereby obtaining more revenue. For users, the unified demand is actually to spend money to buy faster traffic, and if the data exceeds the package, you have to pay. The operator's operation is understandable, and foreign operators also do this. The next step is to see whether users will buy it.

5G package trial

As 5G packages have begun to be tested, more and more users are turning their attention to 5G packages. How to charge for 5G packages has put operators at the forefront. Operators also hope to test the waters with such a new charging model, because it is likely that 5G packages will be charged in accordance with such a model. After all, 4G networks have been difficult to make breakthroughs in technology and business, and users are no longer willing to pay more for them.

Conclusion

The premature implementation of unlimited packages was forced by policy and user pressure, and also overdrawn the commercial value of operators in advance. Changing the unlimited packages is an attempt by operators to break through the difficulties in the early stage of 5G commercialization and seek self-help.