One mobile phone to conquer the world: mankind's last chance for gold nuggets

Chapter 26 How can a broken industry be reborn? (3)
And how to achieve profit?Consumers at this time have two possibilities: The first type of consumers is unwilling to pay, so please watch the advertisement, sacrifice your attention, sacrifice your aesthetic experience, and sacrifice your life time to watch the advertisement, but it is free: content Free, traffic is also free.The platform also earns money through advertising.The second type of consumers have money but no time and cannot tolerate advertisements, so they use the payment model.Whether it is paid or free, it is up to consumers to choose.This will be an infinite loop process: the more users the platform attracts, the more content CP it will attract, the richer the content CP provides, the more consumers will be attracted, the more consumers, the more advertising The bigger the investment, the more content CP will come in... In the end, it will beat the similar video sites and go public directly.Therefore, operators have every opportunity to become incubators and feeders of application platforms. What feeds them?Feed with free traffic.

Case
E-surfing video, video 2.0 era is coming?

According to data released by CNNIC in the 31st Statistical Report on Internet Development, the number of potential online video users in China reached 2012 million in 3.

In November 2009, China Telecom Video Operation Center was formally established. In March 11, E-surfing Video Media Co., Ltd. was established. In June 2011, E-surfing Video completed the first round of private placement, realizing equity diversification, with a valuation of 3 billion yuan. The total amount of private placement is 2012 million yuan.

2012年10月，天翼视讯月活跃用户2700万，流媒体用户数9月达到314万户，户均流量达到46M/户。1～9月业务收入规模达到7.3亿元，同比增长128%，预计2012年业务规模接近10亿。[4]
As of April 2013, Tianyi Video has reached extensive cooperation with nearly 4 partners across the country.The number of users on the e-surfing video mobile platform is nearly 130 million, and the number of paying users is close to 1 million. It has successfully realized the business model of users paying to watch, and has also verified the concept that users are willing to pay for high-quality content with its own development and growth.

When e-surfing video creates new business and new platform, it will consider the combination of three aspects: firstly, it needs to improve the fee sharing platform, which is the premise of win-win cooperation; secondly, it needs to have differentiated high-quality content, which is the basis for users to pay ; The third is to develop channels, gather traffic, and expand influence.

TV2013 "Chuangshi.Cloud" launched in April 4 is a B189B video cloud platform. With its leading technical advantages and carrier-level platform capabilities, it integrates video authentication and billing, streaming media services, Massive ultra-clear video resources and e-surfing user identification capabilities are deeply shared with the majority of Internet video and application service partners.Provide safe and reliable video services and sharing platforms for partners.

The TV189 "Chuangshi.Cloud" platform integrates the third-party video service capabilities and video payment capabilities of traditional video clouds, providing partners with one-stop video conversion capabilities and user payment conversion capabilities.By accessing the "Chuangshi.Cloud" platform, partners will obtain a massive ultra-clear video library, and easily realize one-click payment based on personalized video content.At the same time, relying on the powerful CDN distribution acceleration capability of Tianyi Video, it provides users with a clear and smooth video playback experience. [5]
E-surfing Video is currently only adopting a data preferential policy, but I think the future model is free data, which is tantamount to learning from Internet platform companies to de-telecommize. Traditional traffic business model operators rely on traffic fees to make money, while traffic management The biggest change in the business model is the absence of traffic charges.This is where the thinking of operators cannot turn around, and this is where Google, Baidu, and Tencent succeed.If Tencent QQ charged fees, it would not have the scale of the platform it has today. If Baidu wanted China Mobile to operate it, it would have to pay ten cents per search.The idea of ​​China Telecom Tianyi is to learn from Internet companies. The best way to realize the maximum benefit of traffic value is to free it.What is the result of this?Just like Baidu, Google, and Tencent, with hundreds of millions of people downloading applications and content and watching videos on e-surfing's website, it will be able to surpass Internet companies and become the platform with the largest number of users.Because no matter which Internet company you use to play games or download videos, the content can be free, but the traffic fee must be paid to the operator.

So in this sense, we can see that the rudiments of several business models in the era of traffic management have emerged: porter model, App Store model, Google interstitial advertising model, business model of big data analysis, traffic free capital model, Finally, as an incubation model, continuously incubate partner applications on the platform and realize capital operation through listing. This is the basic model that can be seen in the mobile Internet era.

The key to the success of the operator's application incubation model lies in how to manage the big data generated in various links on the entire platform, and then turn these data into core competitive resources for cross-border operations, cooperate with other industries, or use these data to guide the platform. Incubation of content and applications.In layman's terms, on the table of the operator, who buys and eats the dishes (apps) made by the partners, and which dishes (apps) are rated as delicious, the operator can use these data to tell the other party .It can also find the dishes (applications) made by partners, through accurate data analysis, and find the people who need these dishes (applications) at the lowest cost.If it is willing to spend some money, invest in small start-up companies that make food (applications), make venture capital, and then use big data mining as a support, it can continue to incubate a series of listed companies on these application platforms.Therefore, the biggest opportunity is that operators can become Silicon Valley incubators on mobile phones and "Zhongguancun" on mobile phone platforms.

Around China Mobile's business support base, many companies have been listed. Unfortunately, those listed companies have nothing to do with China Mobile.Because in the mechanism of China Mobile, there is no such system for incubating investment.For state-owned enterprises, if the invested money cannot be recovered, who will bear the responsibility?It is not the business of management personnel to make money from listing, so if everyone does not do this, corruption will eventually form. If operators do not do it, they will collude internally and externally. A case of corruption centered on the data port.From the final point of view, if the system is not reformed, big data must be the shortcoming of state-owned enterprises' flow management.

Only differentiation can earn more handling fees: intelligent pipeline service!

If you only work as porters for pipeline traffic transmission, you must be at the bottom of the industry chain. The only way for operators to make money is to differentiate marketing: by time (busy and idle), by region (network idle area and network busy area), and by time. Quality (fast Internet speed and slow Internet speed).This "three points" is to divide the crowd, and to divide the price and income by treating high-value customers and low-value customers differently.

Operators should learn from airlines when making data packages, and design a first-class Internet access for wealthy people, with priority Internet access, fast speed, but high price.After the base station recognizes the first-class Internet users, when the wireless channel is not enough, it will automatically block the low-end users, just like airlines, when the first-class users board the plane, there is no need to queue at all. There will be a long queue.Taking the same flight is equivalent to being on the same mobile communication network, and first-class passengers have a wider seat, which is equivalent to the bandwidth occupied by mobile high-end users.Why can airlines do this, but telecom companies can't?Many consumers say that this is discrimination, but there is no way. It is a commercial enterprise, not a public service government department, not a charity, and its resources are limited.For low-end users, you can launch the "Moon Card" Internet package: from 12:7 in the middle of the night to 300:4 in the morning, the operator's network is idle, as long as the user is willing to pay ten yuan, 100 megabytes of Internet traffic can be played casually .It's like the plane is about to take off, and there are still [-] seats that have not been sold. At this time, whoever pays [-] yuan will let the passengers board the plane immediately, as long as the money exceeds the drinks and boxed meals the passengers ate on the plane If the cost is high, the airline will make a profit. This is called "grabbing the grass and hitting the rabbit-idling is also idle".

If you only do traffic bit linen bag porters, then a differentiated marketing model is the only way out for operators.But the problem for operators now is that there is no difference in customer service, and the same price is "one size fits all", and they are not as smart as airlines.In traffic management, how to be a differentiated bit porter with smart pipelines is the lowest and most basic business model innovation.

It is better for operators to only make application platforms instead of making applications by themselves. They should launch more large platforms such as "Wolmart", music malls, book malls, game malls, lottery malls, insurance malls, and e-commerce to occupy users' attention. mobile client.In the future, commercial real estate in the world will compete for the biggest prime location, which is to put business on smartphones. The prime location is not in the city center or at the entrance of the subway, but on the smartphones of the mobile Internet era, on the mobile phones of 65 billion users around the world. , whoever seizes the desktop of the smartphone, and whoever seizes the larger scale, will be the biggest winner in the mobile Internet era.

Recommended reading
Experience and enlightenment brought by the United States in the era of big data [6]
The sunset is infinitely good, but it is almost dusk - the telecom giant company that was kicked out by OTT
What are the traditional channels?Just like playing football, the goalkeeper passes the ball to the defender, the defender passes it to the midfielder, and the midfielder passes it to the forward.

What has changed in the Internet age?A defender, bypassing the avant-garde and forward, shot directly with one kick.

Therefore, a word corresponding to the current dispute between the Internet and the telecommunications industry is called OTT (Over The Top). This word comes from basketball and means to pass the ball over the top. Pass the ball over the opponent's head.And OTT is the reason why telecom operators around the world are defeated by Internet companies, because Internet companies use their own special software application business to bypass operators, pass the ball over the top, and directly control consumers.

In the past, the phone number was the most important tool for operators to control and lock users. Users should not lose their phone numbers casually. Got you.But now that there is WeChat, what is the use of a mobile phone number?Whether you are a Unicom user, a China Mobile user, a Telecom Tianyi user, a Vodafone user, or an AT&T user, and no matter which network or country you are on, the important thing is that you have a WeChat account, QQ account, you can Change your mobile phone number casually, and your relatives and friends will always be able to find you.WeChat is an OTT business. It has surpassed telecom operators all over the world. It is equivalent to playing mahjong. The customers of operators are intercepted by Internet companies.Today, China’s Ministry of Information Industry is still carrying out number portability, thinking that this is a measure to promote fair competition. In fact, it has long been outdated and is no longer needed. As long as users have QQ numbers and WeChat IDs, which operator they use The phone numbers are the same.

The mobile phone number is no longer important. This is the power of OTT. Internet companies have passed the top of the telecom giants, passed a ball to the user, controlled the user, and controlled their phone book, which also controlled all the interpersonal communication of the user. and network of contacts, so it has become the largest platform in the era of mobile Internet.The previously monopolized telecom operators have since become small followers and can only charge a little traffic handling fee.

data
OTT leads to decline in operators' revenue

WeChat, Skype, maaii and other instant messaging and VoIP (Voice over Internet Protocol) services directly bypass operators to provide free services to users, diverting the revenue sources of operators' core businesses such as voice and SMS.

OVUM predicts that by 2020, VoIP will reduce the revenue of global operators by US$730 billion, equivalent to 8.9% of the overall voice revenue.Various instant messaging software is also impacting the SMS revenue of operators.According to the statistics of OVUM, in 2011, instant messaging software such as WhatsApp, Nimbuzz and WeChat caused a reduction of US$139 billion in SMS revenue for global operators, equivalent to 9% of the overall SMS revenue.This figure increased to $2012 billion in 232, and OVUM expects the reduction to reach $2016 billion in 540.Domestically, from January to February 2013, the volume of point-to-point text messages was 1 billion, a year-on-year decrease of 2%; the average monthly mobile text message volume per household reached 878.1, a year-on-year decrease of 10.6%. [56]
Skype has more than 9 million users worldwide, and is the service provider with the largest number of OTT voice service users. Skype has announced that the number of registered users who use its services at any time in a day reaches 6500 million.At present, the impact of OTT voice applications such as Skype on the voice revenue of mobile operators is billions of dollars per year; the impact on international calls is particularly obvious. According to Arthur D.Little statistics, currently 25% of the minutes of international calls are completed by Skype of.Ovum predicts that due to the impact of OTT, global operators' voice revenue (including fixed and mobile) will decline at a compound annual growth rate of -2012% from 2020 to 2.4, from US$2012 billion in 9704 to US$2020 billion in 7996 Dollar. [8]
中国工信部发布2013年《1～2月全国电信业统计快报》数据显示，2013年1～2月节日效应推动短信发送总量增长，但点对点短信下滑10.6%，微信对短信替代作用明显。

OTT brings network pressure
OTT and other applications have led to a sharp increase in traffic, bringing pressure on network expansion, and operators' network construction costs continue to increase. OTT, especially applications such as VoIP and instant messaging that require instant online service, the service characteristics of long-time online users have brought enormous pressure to network signaling bearers.

WeChat and other services generate signaling storms: WeChat "always-on" applications will continuously send "heartbeats" to the operator's network. A single "heartbeat" signal itself has extremely low traffic, but hundreds of millions of users, every 2 to 3 minutes Sending out a "heartbeat" is a terrifying sight and will seriously occupy the operator's signaling channel.Just like on a ring road where traffic flow is already very busy, every car goes on and off the emergency lane every 2 to 3 minutes. This is a traffic disaster event.

According to data disclosed by China Mobile, WeChat contributed 10% of the traffic and occupied 60% of the signaling.A large number of signaling signals sent by application software in a short period of time will cause network congestion, and many telecom operators in the world have encountered signaling storms. [9]
For example, AT&T, the US telecom operator with the highest revenue in the world. In the United States in 2009, the Apple iPhone brought a large number of new users to AT&T, and each iPhone user brought AT&T an average annual income of US$1000, which was twice that of other mobile phone users.However, the iPhone's hunger for network bandwidth and the surge in signaling volume have also brought a lot of problems to AT&T's network: frequent network accidents such as dropped calls, data congestion, and slow network speed.According to analysis, iPhone users account for only 2% of AT&T mobile phone customers, but they account for 3% of AT&T's network traffic. [40]
Against WeChat, what are the odds for operators to win?

I once had a Weibo post that sparked a debate: "Free WeChat is the killer that will bring down China Mobile. When WeChat users reach 7 million, it will be the bottom day of China Mobile."It’s as if it wasn’t Fujifilm that beat photography giant Eastman Kodak Co., but digital cameras—“Your (Kodak) profits come from film, it (digital cameras) don’t use film.”Kodak was still No. 1 in the global film market when it went bankrupt.China Mobile, which has 7.2 million users, has an annual revenue of more than 5000 billion yuan and a profit of nearly 1300 billion yuan. Revenue from traditional services such as voice, SMS, and MMS accounts for about 70% of its total revenue, and these services happen to be the attraction of WeChat for free. In the future, operators who have lost such a large amount of revenue can only rely on Internet traffic revenue to make up for it in the future. However, China Mobile lacks fixed-line broadband and is dragged down by the quality of 3G mobile phone networks. Therefore, the fatal impact of the three operators is of course the Internet The company Over The Top (OTT) over the top pass marginalized China Mobile. At the beginning of 2013, WeChat reached 2 million users in less than two years. Coincidentally, at this time, China Mobile's main profit began to grow by -3%, and this was just the beginning of a recession!
Recently, China Mobile took the lead in issuing a warning to WeChat, and held a meeting with China Telecom and China Unicom, hoping to charge WeChat additional fees such as additional signaling resources, otherwise it has the right to terminate the transmission of WeChat. In essence, it hopes to use government power to save itself. parent-child business.The rivalry between the state-owned pipeline giants and the private Internet platform giants is intensifying.

I think: China Mobile may not be the big winner in this confrontation, and in the end all parties to the confrontation will end in compromise.

(End of this chapter)