Telecommunications Industry Newsletter

Summary

1. Analysis of operating and financial data of the top three telecom operators in China

• Since 2016, the growth rate of mobile subscribers of the telecommunications industry has slowed down, the growth of the industry has reached bottleneck, the structure of mobile subscribers continuously shifts towards 4G.
• The revenues from mobile telecommunications services of the top three telecom operators have increased by 3.7% in the first half year in 2016, which accounts for 72.5% of the total telecommunications service revenues. China Mobile takes the advantage of 'mobile +wireline network' synergistic effect to increase their market share in the wireline market.

2. The effects of new transfer pricing policies on telecommunications industry

• The Notice No.42 and Notice No.64 have revised the declaration, documentation management, and advanced pricing management.

3. Insights on customers behavior

• Although there have been some hardware and content for VR technology, the penetration of VR devices is still low at present.
• Domestic mobile phones have become more popular, and begun to surpass imported mobile phone. The market share of domestic mobile phones will further increase in the future.
• The market of traditional short messages and voice services become smaller, while the market of data traffic will become the main stream of future development.
• 4G is penetrating and becoming the mainstream with a sharp increase in the coverage of users. Trend followers and necessity buyers have become the main force of 4G adoption. High value-to-price ratio has become the key for market development.

4. Data Management is the core of companies' informatization strategy system

• High quality data analysis can support companies to make decisions from different levels.
• Based on data analysis, companies can conduct precision marketing, customer segmentation, and transform the situation that data quality can create problems to another situation that data becomes valuable and profit-making.

5. Personalized technology Hub

• 3I（Interconnectivity, intellectuality and identifiability）is important to the future development of personalized technology
• Interconnectivity makes connected devices operate as parts of coordinating ecosystem.
• Intellectuality aims to understand the collected data, the utilization of data and the action that needs to take.
• Identifiability means to identify the target customers and provides personalize experience according to user preference.

6. Updated financial report, regulatory system related issue and tax policies