The telecommunication industry: Challenges & opportunities

Telecom operators are facing increasing challenges in the digital era. Communication tools based on the Internet, such as Weixin, Weibo and Twitter, have dramatically reduced the traditional profits of telecom operators for SMS and voice calls, and they are trying hard to avoid becoming just simple data channels in the digital era.

From the past experiences of some off the world's well-known telecom operators, the best strategy, they say, is to build up an open platform that can attract participation from hardware providers, end device suppliers, content developers and end users. Telecom operators should also lead the healthy development of this ecosystem, and the gene combination of Internet and telecom companies will become the core competitiveness.

For the three telecom operators in China, the upcoming 4G battle is crucial. Standard choosing and the timing of market entry are key strategies.  Obviously, China Mobile will take the first move advantage of 4G, China Telecom and China Unicom could also consider giving up their 3G sunk costs by entering into the 4G realm to seize the future market.

Mobile Internet and big data will create tremendous opportunities for telecom operators. Mobile internet is expected to be booming in the following three years.  Telecom operators control the last mile for all mobile devices to access the Internet, and therefore will share the future profit from the mobile internet market. Currently, telecom operators are advised to enhance customer loyalty and increase the migration cost for changing the mobile numbers and switching service providers. A large user base is the key to winning market share in the mobile internet arena, and telecom operators are able to secure a huge number of low-end users through subsidizing low-cost Android-based devices.