Why does China Unicom push smart home strategy?
Prior to this, Xiaomi and other terminal companies, Haier and other home appliance companies, Alibaba and other Internet giants have entered the smart home and smart ecological market. Why did China Unicom choose to enter the smart home business at this time?
The FDD 4G license was approved. On February 27, 2015, the Ministry of Industry and Information Technology officially issued the FDD 4G commercial license to China Unicom and China Telecom, which means that China Unicom has been able to deploy 4G networks and develop 4G users on a large scale nationwide. However, prior to this, China Mobile was granted a TD-LTE 4G commercial license on December 4, 2013, and the 4G service has been ran for one year. According to the data released by the Ministry of Industry and Information Technology, as of January 2015, the number of 4G users of China Mobile has exceeded 100 million, and the share of 4G users in China has exceeded 90%. For China Unicom, the launch of the Converged Package through the combination of FDD 4G network and fixed-line broadband is an important measure to improve its 4G market competitiveness.
Smartphones have entered the mature market. In the 3G market, China Unicom quickly detonated the domestic smartphone and 3G market by pushing thousands of smart phones. However, after nearly four years of rapid growth, China has surpassed the United States to become the world's largest smartphone market, but at the same time it has rapidly transformed into a mature switch market, and the mobile phone market growth ceiling has emerged. According to the Ministry of Industry and Information Technology, in 2014, China’s smartphone shipments reached 389 million units, down 8.2% year-on-year. For operators, as subsidies continue to decrease, it is necessary to develop pipeline traffic and business growth markets other than intelligence.
Intelligent ecological industry integration. With the entry of enterprises from various industries, smart home and smart ecology have become the battleground for future capital markets and corporate giants. China Unicom, a basic telecommunications operator, hopes to integrate various types of industry enterprises, create an intelligent ecological platform centered on pipelines and services, and select the entrance of strategic users to continue the control advantage of the smart phone era for the industry chain.
Compared with terminal and Internet companies, what are the advantages of China Unicom's “Smart Wo�
Basic telecommunications capabilities. In the “Smart Warrior†platform, China Unicom has highlighted its “Double Hundred Mega†strategy for FDD 4G network + fiber-optic fixed-line broadband. The target network access to the village level during the year covers more than 95% of the domestic population. In addition, China Unicom currently has 300 million mobile phone users and 70 million fixed broadband users; more than 10,000 business halls and sales outlets, reaching the township level; 120,000 community marketing service personnel across the country, covering 100,000 community outlets nationwide .
Business carrying capacity. China Unicom has deployed ten core cloud data centers in China, which can open cloud storage capabilities for partners and provide complete telecom-level basic cloud service functions. In the field of Internet of Things, China Unicom has reached cooperation with more than 5,000 companies, covering areas such as car networking, wearable devices, production/link detection, and mobile payment.
Centralized operational capabilities. After the transformation of the whole network in 2014, China Unicom currently has a national centralized billing account and customer management system, which can achieve a little access to partners and nationwide coverage.
Cooperation and innovation capabilities. Xiong Wei said that China Unicom will provide innovation incubation for small and micro enterprises through the “Smart Wo Home†platform and foster the development of small and micro enterprises.
Challenges for operators to push smart home strategy
China Unicom hopes to continue and expand its ability to control the industry in the era of smart phones by building a “smart home†platform. However, the smart home platform and smart ecosystem are obviously a very large commercial field. China Unicom, as the basic operator, will face the following challenges:
1. Reduce the control of the industry. Operators' control of the smartphone industry in the 3G era relies on strong terminal subsidies and channel subsidies. However, as operators have significantly reduced terminal subsidies at the request of the SASAC, and the smart home platform is a large commercial area that integrates several industries, it is difficult for operators to continue the previous industry control capabilities. Giant companies like Xiaomi and Alibaba, which have strength and are already building smart ecology, will no longer rely too much on the cooperation of operators.
2. Competition between operators and homogenization. Compared with China Unicom's "Smart Wo" strategy, China Telecom has also launched a new brand of smart home "Yue Me". With the rapid deployment of fixed-line broadband, China Mobile will quickly enter the market with its current 4G network coverage advantage. For operators, homogenized market competition means that price wars and industrial influences are reduced.
3. The trend of operators' pipelines is accelerating. As operators' voice and SMS revenues decline, data traffic is becoming the main revenue and profit point for operators in the future. With the erosion and transformation of various traditional industries in the mobile Internet era, operators are moving further and further away from the market center of high value-added businesses. For traditional telecom operators, the trend of being pipelined is accelerating, which means that operators are more concerned about how to enhance traffic management by strengthening cooperation with large platforms or smart ecosystems, and to become telecommunications and decentralized. The difficult choices that businesses are currently facing.
4. Improve execution. From the 2G mobile Monternet era to the 3G mobile Internet era, history and market prove that operators do not lack the top strategy and talents, but the key is that the current system limits the operators' rapid decision-making and execution capabilities, as well as internal talent incentives. In the era of intelligent ecology, operators are facing more powerful competitors such as Xiaomi and Alibaba. How to rationalize internal mechanisms, strengthen incentives and innovation, and improve execution capability will be a high-level for operators. A major test.
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