The 5G era is unlikely to change the market structure of operators

The three major domestic operators have all announced their performance. China Mobile continues to dominate the market, with a net profit six times the sum of China Unicom and China Telecom. China is expected to start commercializing 5G next year. Some people believe that the 5G era may reshape the market landscape. The author believes that China Mobile is likely to continue its current dominance in the 5G era.

China Mobile's leading advantage is obvious

In the current 4G era, China Mobile has maintained its leading edge. According to the data released by the three major operators in February this year, the number of mobile users of China Mobile, China Telecom and China Unicom were 894.6 million, 259.28 million and 289.84 million respectively, and the number of 4G users were 661.8 million, 193.33 million and 187.13 million respectively. It can be seen that China Mobile leads China Telecom and China Unicom in both the number of users and the number of 4G users.

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Recently, the three major operators announced their performance in 2017. China Mobile also ranked first in terms of revenue and profit. The revenue of China Mobile, China Telecom and China Unicom were 740.5 billion, 366.2 billion and 249 billion respectively, and the net profit was 114.279 billion, 18.617 billion and 430 million respectively. The net profit of China Mobile was six times the sum of the net profits of China Telecom and China Unicom.

More importantly, in the broadband business, which was once regarded as the competitive advantage of China Telecom and China Unicom, China Mobile's number of users has grown rapidly and has significantly surpassed China Unicom, and is narrowing the gap with China Telecom. Data from February this year showed that the number of broadband users of China Mobile, China Telecom and China Unicom were 119.8 million, 135.54 million and 774.73 billion respectively, and the net increase in users was 3.081 million, 980,000 and 433,000 respectively. Under the fierce competition from China Mobile, China Telecom and China Unicom are being forced to lower their broadband prices.

China Mobile is expected to dominate the market in the 5G era

In the 3G era, China Mobile obtained the domestically produced 3G technology TD-SCDMA, which was the most mature and not as good as China Unicom's WCDMA and China Telecom's CDMA. However, China Unicom and China Telecom did not gain a leading edge, and eventually formed a three-way split. In the 3G era, China Unicom obtained the best 3G standard, but its performance was the worst, with a net increase in mobile users less than China Mobile and China Telecom.

In the 4G era, China Mobile operated TD-LTE, which was slightly inferior to LTE-FDD in terms of technology. China Unicom and China Telecom waited until the country issued them LTE-FDD licenses before they began to build LTE-FDD networks on a large scale. However, judging from the final data, China Mobile achieved the best results than China Telecom and China Unicom. It can be seen that China Mobile has shown strong competitiveness in both the 3G era and the 4G era, leaving China Telecom and China Unicom at a disadvantage in the market even though they have leading technical advantages.

It is expected that in the upcoming 5G era, the 5G technologies of the three major operators will tend to be unified, and there will no longer be advantages and disadvantages in technology. Considering the outstanding achievements China has made in the 3G and 4G eras, it is believed that China Mobile will continue to maintain strong competitiveness in the 5G era.

China Mobile has announced that it will commercialize 5G. It has the most abundant funds, with hundreds of billions of cash, and is expected to quickly build a 5G network. China Telecom has hundreds of billions of debts, and China Unicom has hundreds of billions of debts. Since 5G is based on higher frequency bands, it will cost much more than 4G, and the funds are under great pressure for these two operators. China Unicom will be the most disadvantaged in the 5G era. Its current 4G network coverage is the worst, and in the 5G era, 4G and 5G networks are expected to coexist for a considerable period of time, which may cause it to fall into a situation of dual network fighting again.

In summary, the author believes that it is wishful thinking to expect the 5G era to change the current operator landscape. The 5G era will most likely maintain China Mobile's monopoly, which stems from the strong competitiveness that China Mobile has always possessed.