After the telecom restructuring, many people in the industry are optimistic about the new China Telecom. The reasons are that China Telecom is very strong, the team led by Wang Xiaochu is also quite solid, and its innovation ability is strong. The existing fixed network business plus the C-network packaged by Unicom as a "high-quality network" will generate considerable explosive power when combined. However, those who are inside the situation do not think this way, instead, they feel great pressure. Recently, I chatted with a friend from China Telecom and learned about their internal ideas regarding taking over the C-network, including online customer service. The first feeling of these insiders is that China Telecom spent 110 billion yuan to buy the C-network, which immediately saddled it with a heavy financial burden. Moreover, after taking over the C-network, there is an immediate need for 3G upgrade and transformation work, which also requires substantial capital investment. These investments will put more pressure on China Telecom. Besides, under the strong market squeeze from Mobile and Unicom, no one knows when this huge investment will be recovered. If it could have been two years earlier, when there was still significant growth potential for China's mobile phone users, China Telecom obtaining the C-network or getting a mobile license would have instilled more confidence and allowed it to compete with the existing mobile operators. According to the latest official data, as of May 2008, the total number of mobile phones nationwide has reached 590 million, marking that the growth of China's mobile phone user numbers has already reached a turning point. The potential of the new user market has significantly decreased, and the battle among operators to vie for old users will become increasingly fierce. As the weaker party with only 40 million users, the cost for China Telecom's C-network to develop users will be much higher than before for Unicom and Mobile, and competing with Unicom and Mobile, whose user numbers far exceed its own, the pressure on China Telecom is imaginable. Many people believe that China Telecom's Little Smart and fixed network users are a big treasure for the development of the C-network. For example, measures can be taken to encourage Little Smart users to switch to the C-network; and fixed network services can be bundled with mobile services, offering free or reduced call charges between China Telecom's fixed-line users and C-network users, while providing some mixed value-added services to attract users to join the C-network. However, in reality, without the introduction of substantive asymmetric regulatory policies, it is not easy to pull users to the C-network, after all, changing a phone number is a troublesome matter for anyone. Some people believe that the tripartite confrontation between New Telecom, New Unicom, and China Mobile will inevitably spark a round of fierce price wars. But those inside the situation do not see it this way. The fact remains that China Mobile dominates the market. In a price war, it’s unclear who could outlast China Mobile. Under such circumstances, China Mobile will practically dominate market pricing. The price war won't be as dramatic as people imagine, and the various operators' fees won’t be overly extreme. Everyone is state-controlled, and there is still a common major shareholder watching over things. In general, unless more effective policies are introduced to nurture the weaker operators, the expected competitive landscape may be hard to form, and the goals of this restructuring may not be achieved.
Customer Service 360 is a platform that provides online services for enterprises, helping you with various business applications on the Internet, and comprehensively enhancing your corporate competitiveness.