In the world of mobile communication, pure technology is only one part, healthy and strong of industrial chain are the key points. So, it is easy to understand why CDMA still can't compete with GSM even with obvious technological advantages, only curled up in individual markets.
In this example, the embarrassment of non-mainstream industry chain is more than clear, but will everything goes smoothly even when occupied the mainstream of industrial chain? From the present situation of China Unicom, the answer is no. In the 2G era, China Unicom adopted the most mainstream GSM technology, the most mature WCDMA technology in 3G era and will get LTE FDD commercial license in the 4G era.
China Unicom got all the mainstream technologies in 2G, 3G and 4G eras, but now it is faced with an unprecedented predicament. Just like a top expert of China Unicom Network Research Institute who said, "China Unicom is very intensive and gorgeous in the network layout, but it’s very difficult in the transformation, like we are still wearing gloosy shoes while it’s snowing outside the door."
For operators, the most concerned parameters are nothing but the number of subscribers and ARPU. According to the operation data of August that China Unicom issued, a net increase of 635,000 subscribers was obtained, hitting the new lowest record in this year, and the ARPU of mobile broadband subscribers also greatly declined in this year.
Snow outside the door
For China Unicom, the weak growth of subscribers and the continuous loss of high-end ones is a dangerous signal, the competitive advantages that it established based on the WCDMA industry chain is gradually slipping away. On the contrary, China Mobile began to catch up with the others and formed a "first mover advantage". From the current market operation pattern, China Mobile alone occupies more than 99% of the 4G subscribers in China, and basically has formed full network coverage ability in valuable markets; in addition, the capital market is also recognized with China Mobile's performance, with the share price has already exceeded 90 HK dollars, China Mobile has formed a significant first mover advantage.
"China Unicom also has LTE license, but although we have gradually started 4G marketing in several regions from March, we are at most trees, and haven’t formed a forest." The experts said.
Of course, there are many reasons for the snow outside of the door, but there is a key point, that is the time when the government issued 4G licenses. “LTE did develop rapidly, but not as we have expected, it is the world's development that is very fast, the licensing of LTE licenses by Chinese government is also very fast with an interval of 4 years, the LTE licenses are generally issued when the 3G share exceeded 60% in the world, but in China the share was less than 30% when the licenses was issued.”
Glossy shoes
The shoes that China Unicom wears are so smooth and gorgeous in 3G era, but on the hand so shabby in the 4G era.
After obtained the WCDMA license, China Unicom was high-spirited and vigorous. In the next few years, China Unicom still maintained a high strength of WCDMA network input even when faced with great pressure on investment. In some economic areas, there even realized full network coverage of 42Mbps HSPA+.
But faced with the "great leap forward" of China Mobile’s TD-LTE network deployment, the shoes of China Unicom began to dim. Whether to follow or not, it is a huge problem. As the expert of China Academy of Telecommunication Research Shen Jia sees it, LTE is a typical investment and competition drived technology, once one operator starts scale deployment, the rest have to follow, otherwise it will be too difficult for them to win the market competition.
If the choose is to follow up, it will be a great challenge for China Unicom's investment ability, taking the present profitability and cash reserves into account, it is a basically impossible task; if doesn’t follow up, then it will be a disadvantage in the future market competition. The real example is right here, Verizon, the CDMA operator of United States, completely reversed the market competition pattern by firstly large-scale deployment of the LTE, and forced AT&T to follow up in LTE network coverage.
More seriously, China Unicom began to face a new "double network battle" problem, it was the CDMA and GSM in before, but now it is HSPA+ and LTE. "The two rivals can try to run forward when the network evolution meets obstacles, but we can’t now. Some vendors have stopped subsequent research of 3G, which means a big challenge for us, we have cooperated to promote the subsequent development of 3G network with several domestic and foreign operators, hoping to maintain a longer life cycle of 3G, and let more subscribers feel an excellent Internet surfing service."
As we can see, the new "double network battle" problem will plague China Unicom in a long time; of course, you can also think that China Unicom will make full use of the value of WCDMA network. How to put the money not distributed in multiple baskets is a problem that China Unicom needs to consider.