NB-IoT tariffs will be adjusted. Has anyone started stockpiling SIM cards?
Latest update time：2019-10-12
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The Ministry of Industry and Information Technology summoned the three major operators!
The State-owned Assets Supervision and Administration Commission called on the three major operators!
The State Council Inspection Team interviewed the three major operators!
A lot of news has appeared in the newspapers, aiming to regulate the operating models of operators and avoid damaging the interests of the country and consumers.
Judging from the current situation, the good old days of subsidies will gradually fade away!
The three major operators are continuously moving from extensive to refined management and control!
The State-owned Assets Supervision and Administration Commission of the State Council has explicitly required operators to cut subsidies for smart terminals such as mobile phones and set-top boxes.
Specific regulations: Taking 2018 as the base, social channel costs will be reduced by 20% in three years, of which channel remuneration will be reduced by 20% each year, and all channel remuneration will be cancelled from 2022.
In the 3G era, subsidies for contract phones were the mainstream business model for operators to develop customers.
In the 4G era, the three major operators increased their marketing investment through price wars, terminal subsidies, increased channel partners, excessive advertising exposure, and physical gifts. However, the results were contrary to expectations. The revenues of the three major operators have declined and profit growth has reached a bottleneck.
Entering the 5G era, operators have to face the government's requirements for speed increase and fee reduction on the one hand, and also have to invest heavily in 5G network construction. It is highly likely that 5G mobile phones will not see the situation of exchanging subsidies for market share.
Under the operator subsidy model, the attitude of many terminal manufacturers is:
laughing while crying!
On the one hand, in order to cater to the operators' bidding, the price was lowered to the floor price, and I wanted to cry after seeing the winning bid price.
On the one hand, in order to expand market share, strategic investment is still worthwhile, and we will continue to greet customers with a smile.
In the past, the marketing expenditures of the three major operators have been increasing year by year, with an annual growth rate of more than 10%, and marketing expenditures accounted for about 20% of total revenue.
China Mobile actively responds to the fierce competition in the market for large-traffic, low-cost packages by strengthening retention of existing customers, optimizing package combinations, and carrying out integrated marketing.
China Telecom adheres to an active market strategy and achieves new breakthroughs in scale.
China Unicom deepens its traffic management and strives to promote win-win results with small profits but quick turnover.
All efforts cannot avoid the vicious competition among the three major operators!
From the business philosophy of operators around the world:
Cut marketing expenses,
Cut off channel rewards,
Cancel terminal subsidies,
Increase operator revenue,
This will be the mainstream business philosophy of operators for a long time to come.
Judging from the 148 NB-IoT networks that have been built around the world, operators aim to optimize the allocation of spectrum resources to serve low-power wide area networks to a greater extent, rather than trying to achieve large-scale connections through disorderly competition.
In countries with relatively strong competition, such as China, the competition among the three major operators in the NB-IoT field has provided each of them with unlimited room for imagination, and has also brought about an unprecedented wave of tariff subsidy wars.
Since the pricing of NB-IoT is different from the pricing model of voice, SMS and traffic, there is no mature reference experience.
In the era of voice calls, the pricing was based on the duration of the call.
The most controversial issue was whether to charge by the minute or by the second. The operator finally chose to charge by the minute, so even if the call lasted 3 seconds, it would still be calculated as 1 minute.
In the SMS era, the service is charged on a per-sent basis.
Each time a text message is sent, a text message fee is charged. Eventually, SMS value-added service providers emerged. They are not more expensive, but cheaper. In layman's terms, they get the factory price from the operator and then sell it to customers at a wholesale price, which is cheaper than the retail price.
In the era of data traffic, users are charged by byte.
Stimulated by the popularity of smart phones and the rich content of mobile Internet, consumers' data traffic usage has been rising steadily, so much so that consumers don't even know where their data has gone. It is lost silently.
In the era of Internet of Things, people have found that the previous billing methods are not suitable for the development of the times, and have redefined new billing methods, namely, billing methods that combine time periods, number of transmission and reception times, data volume, power saving mode, cloud platform services, etc.
Within a limited time, such as a yearly period, if the number of times exceeds the agreed number, a high-frequency usage fee will be charged. Taking China Telecom as an example, the NB-IoT tariff is defined as follows:
However, in the early stages of NB-IoT promotion, it was difficult for users to accept such a charging model.
Therefore, local operators have their own subsidy and promotion models. There is not only competition among the three operators, but also competition between different cities of the same operator.
For the purpose of KPI assessment, everyone’s promotion models are varied. Some people can get lower rates, while others find it difficult to get them.
Everyone likes to spread the lowest rates. Those who get them often show off to others, and those who can’t get them put pressure on familiar operators.
The pain for operator account managers is that there are always operators with cheaper rates than their own.
The pain of purchasing managers of terminal enterprises comes from the fact that their bosses often hear that other people’s rates are cheap, while their own are too expensive.
The government requires operators to optimize spectrum allocation and does not require the implementation of disorderly competition.
The Ministry of Industry and Information Technology requires the three major operators to increase speed and reduce fees to bring benefits to consumers;
The SASAC requires the three major operators to prevent the loss of state-owned assets and achieve profit growth;
The State Council inspection team requires operators to avoid falling into the vortex of violations of discipline and regulations and profiteering while increasing speed and reducing fees.
The government hopes to revitalize spectrum resources and improve their utilization. If China Mobile is left to stick to its 2G network, it will be a huge waste of limited spectrum resources.
Therefore, China Mobile freed up its 5M 2G spectrum to allow China Unicom to develop its 4G network.
China Mobile's decision-makers saw that the situation was hopeless, so they decided to use the 5M 2G spectrum to develop their own 4G network. As for the development trend of the 2G network, let it go.
The 2G network was shut down at any time, and many users decisively gave up their 2G terminals. In this year's bidding process, they generally chose NB-IoT networks, which also promoted NB-IoT smart gas meters and smart water meters to exceed the 10 million scale mark.
Does the chaotic pricing promote or hinder the development of the industry?
Up to now, NB-IoT tariff pricing has been in place for more than two years. In order to promote the development of the NB-IoT industry, operators have implemented different forms of tariff subsidies.
For example, many provincial operators implement shortlisted bidding, and provide tariff subsidies ranging from 20 to 30 yuan for shortlisted NB-IoT communication module companies. Some places even implement package tariffs, where NB-IoT communication modules plus 10 years of tariffs can be around 30 yuan.
In regions that implement this subsidy method, meeting KPI assessment indicators is a piece of cake. However, for operators that do not implement the subsidy method, the pressure becomes extremely great.
Take China Telecom as an example. In order to balance the interests among provinces, it stipulates that the inter-provincial settlement fee is 0.1 yuan/month/terminal. However, this is also difficult to stop some city-level operators with flexible models from forging ahead.
The market needs competition, but disorderly competition will bring endless troubles to the market.
The network provided by the operator is essentially a commercial network that charges regular fees.
In the early days, NB-IoT faced competition from unlicensed spectrum communication protocols. The focus of discussion was that LoRa did not charge service fees, while NB-IoT did.
Soon, this superficial conclusion was exposed by users:
1. LoRa requires repeaters or base stations, needs to find an installation location, needs power supply, needs to pay site fees, needs pre-deployment planning, needs post-deployment operation. New buildings will block the signal, grown trees will also block the signal, and the terrestrial digital TV opened in many places will also interfere with its signal reception. Many companies only guarantee 1 year of service and cannot guarantee 3 years or more of operation and maintenance, etc.
Conclusion: It seems that LoRa does not charge service fees like NB-IoT operators, but the potential cost expenditure is quite large.
2. NB-IoT is an operator network that provides customers with an operating network with QoS service quality. Users do not need to worry about network signal coverage, base station site selection, network maintenance, network optimization, large-area networking and other demands. They only need to pay a small service fee and the operator will provide you with a high-quality service network.
Conclusion: Users only need to use the Internet, just like the promotional model of cloud computing, you can use resources on demand just like using water and electricity.
NB-IoT is developing rapidly in the cooperation and competition of the industrial chain!
Today, the first phase of the rapid growth of NB-IoT connections has exceeded market expectations. In order to achieve long-term and orderly development, operators will formulate new strategies for SIM card rates, which are expected to be implemented in 2020.
According to the development strategy and evolution model of operators, the preferential policies in 2018 will be changed in 2019. Entering the fourth quarter of 2018, many city operators were willing to cooperate with terminal companies in order to complete KPI assessment. As a result, many companies stockpiled a batch of cheap SIM cards, which brought substantial profit space for subsequent orders.
Operators generally report that their rates are too low and that they need to subsidize a lot of operating expenses. The SASAC hopes that operators can achieve healthy competition, develop users, but avoid violating disciplines and regulations and causing the loss of state-owned assets.
Many factors have led operators to optimize their service models and improve service quality rather than relying on low-price subsidies to operate in the long term.
Before the new policy is finalized and implemented, many companies have made arrangements in advance and taken advantage of existing preferential policies.
Stock up, stock up, stock up,
Stock up a batch of SIM cards. There is no rush to pay anyway, so just pay as you use and make full use of existing policies to cope with future market competition.
In order to compete, to bind customers, and to gain the initiative in bidding, many terminal companies give priority to the business model of product package pricing.
Of course, operators are also happy to cooperate.
Therefore, stockpiling SIM cards is actually a strategic move.
The development of anything,
They are all moving forward amidst the shock.
We will witness a rapid expansion in the scale of NB-IoT connections.
Author: Xie Yunzhou
Source: 5G Internet of Things Industry Alliance
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