How long can the high growth momentum of China's communication network continue? ? ? ?

liudong2008lldd

How long can the high growth momentum of China's communication network continue? ? ? ? [Copy link]

In recent years, the market size of my country's communication products (including data communication, access network, program-controlled switching, optical transmission, optical fiber and cable, and other equipment; the same below) is 85.9 billion yuan (including 14 billion yuan for data communication, 37.5 billion yuan for access network, 11 billion yuan for program-controlled switching, 12 billion yuan for optical transmission, 11 billion yuan for optical fiber and cable, and 400 million yuan for other equipment). In 2001, the market size of my country's communication products is expected to reach about 110 billion yuan (official statistical data has not yet been seen), basically achieving a high growth rate of more than 20% for many consecutive years, which has impressed the world. However, there are many reasons for us to believe that this high growth cannot last too long, and another 3 to 5 years is a very optimistic estimate. The author has this view based on the following considerations:

1. The economic environment has become worse

The September 11th Incident can be regarded as a turning point in the world economy. Before that, although the world economy had shown signs of slowing down, it had not yet reached a state of stagnation or recession; after that, the world's trade volume shrank significantly, the stock market plummeted, and the economy of the locomotive, the United States, went from growth to stagnation, and even negative growth. Originally, we thought that China would be outside the impact of the September 11th Incident, but it didn't take long for its negative impact on the Chinese economy to become apparent: my country's export growth rate dropped sharply, and the growth rate of the gross national product was also affected.

From the perspective of operators, due to the impact of the international climate, many domestic operators who wanted to go to the international capital market to raise money were blocked, making it impossible for their construction projects to proceed as scheduled. Some blindly optimistic manufacturing companies have already tasted the pain of being forced to tighten their belts midway and lay off employees at the end of the year due to overestimating the market demand in 2001. According to internal sources, Huawei originally planned to double its sales in 2001 based on 2000. However, according to the public figures now, it is only 25.5 billion yuan, far from the target at the beginning of the year.

The development of an industry cannot be too far away from the development of the economic environment. In this case, although operators need to add new services to attract users, they cannot increase their investment in communication network construction too much due to the deteriorating economic environment. The overall slowdown in investment in communication network construction is inevitable.

2. Market saturation

The Internet boom has lasted for eight years in China since 1994. After more than eight years of construction, China's communication network can be said to have been built to perfection.

In terms of backbone networks, the earlier ones include the well-known "eight vertical and eight horizontal" fiber optic networks; the more recent one is the 40G backbone network built by Netcom last year, connecting dozens of cities in the east; in addition, China Telecom's backbone networks in various provinces have been basically completed, and the bandwidth between provinces has reached 2.5G. Almost all medium and above cities have established broadband data networks; the total amount of my country's international export bandwidth has reached 7597.5M.

In terms of access network, let's take broadband as an example. A wave of broadband has swept across China. If you use the powerful Google search engine to search for the keyword "broadband", it will give you 612,000 results in just 0.13 seconds. Since the end of 1999, broadband networks have become popular. Ethernet, xDSL, and Cable Modem compete with each other in the field of user access. From 2000 to mid-2001, broadband really swept everything - whether it was a new community or an old community, it was all taken. Of course, many broadband community operators have already fallen into trouble, all of which were swept into trouble by the craze. Although it seems that the broadband craze is now suspected of being hype, it is undeniable that the community resident network has been built in a real way, and the market space left is not large.

3. Difficulty in making profits and risks brought by rapid technological updates

Pure broadband is no longer able to attract people's attention. Broadband construction must form a "broadband chain" with access providers, service providers, content integrators and real estate developers participating together, achieving mutual benefit and win-win results. The mistake of the broadband boom was that it only emphasized the participation of access providers and real estate developers, while ignoring content providers. The lack of application services left broadband operators helpless, so in 100% of broadband communities with broadband wiring, only a few to ten percent of users opened and used them, which was very pitiful. Operators could only watch their equipment lying there, calculating when they could make back the money they invested. The difficulty in making a profit made all investors hold their purse strings tightly.

There is another risk here, which is that the technology update brings about the problem of outdated equipment. Nowadays, new technologies emerge in an endless stream, and equipment is facing obsolescence after a short period of use; new businesses are also constantly emerging. One day, a new business can greatly attract users, but your current equipment cannot carry out this business and you have no money to invest, then you can only watch others make money without any recourse.

Perhaps smart operators will soon find a profitable model, but as mentioned earlier: if the "broadband chain" is not fully established, the vitality of this model is questionable.

Investors will decide whether to invest after they have calculated the return clearly. If the return is too far away and they are not sure, then they will not do it. At present, before the emergence of a business that can attract most users to pay, no one will use their own money to become a pioneer that is bound to fail.

4. Operators are becoming more mature in their decision-making and no longer blindly invest ahead of time

The model of the foreign telecommunications industry is: operators and a small number of equipment manufacturers form an alliance, participate in each other's business development and business process design, achieve benign interaction, and form a value chain between suppliers and operators.

Domestic operators are basically behind their foreign counterparts in terms of technology and operational thinking. Most of the leading equipment manufacturers are also foreign. Therefore, "mutual participation in each other's business development and business process design" has become one-sided, and equipment manufacturers have completely guided operators. The consequence of this situation is that operators in many provinces and cities in my country have spent a lot of money that should not have been spent under the wrong guidance of foreign equipment manufacturers, and invested heavily in building a network that is far ahead of the current consumption and application level.

Of course, these are things that have happened before. China's operators are maturing. We have already seen the initial value chain formed by operators and domestic equipment manufacturers. Operators will build according to the actual needs of their own business development, and will no longer blindly build an empty city that no one uses.

In addition, domestic operators have begun to learn from the lessons of foreign operators that were washed away by the new economy, and have gradually slowed down their demand and construction speed, becoming more cautious and demanding. We believe this is a sign that China's telecommunications industry is moving towards rationality and maturity.

The above facts tell us that the rapid growth of the Chinese market is coming to an end, approaching saturation, both at the core/aggregation layer and at the access layer. It is impossible to maintain high growth.

Reprinted from: Jishi.com

liudong2008lldd

With the rapid development of society, people pay more and more attention to the scale and efficiency of the network. At the same time, the high growth momentum of China's communication network tells us that there is still huge potential for network communication waiting for our development and utilization. Of course, based on this, we will definitely increase the strength of our communication network and further improve China's network communication field.

1234

I support the original poster's point of view. This is especially true in China. As operators expand their networks at all costs, there is too much duplication of network construction, and the domestic network idle rate is very high. Network investment accounts for about 70% of the entire communication investment, and it has long been in a saturated stage. Apart from a few major operators, the likes of railways (spun off into Tietong), electricity (once planned to establish Dentsu), and radio and television (which is as powerful as the operators) are all eyeing the market. However, the market size is limited. If there is no new business attraction, the growth of voice business is limited. Yesterday I read an article by Professor Kan Kaili, saying that the current hot 3G in China only has 20% of non-voice business in mature foreign markets, so 3G is not a life-saving straw. Some new applications such as IPTV, digital TV, and mobile TV are potential business growth points.