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Looking back to communication industry for thirty years to embrace new opportunities in the 5G Era

Time: 2018-10-25
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Development of communication industry


After more than thirty years of development, China has become a great power of communication industry. According to statistics, China's fiber optic cable output has accounted for 60% of the global total output, equipment system output accounted for more than half.


Prior to the 1990s, China's telecommunications service industry basically followed the planned economic system model. The design institutes and engineering companies of the Provincial Posts and Telecommunications Administration provided corresponding design and construction services. Each Telecommunications Bureau set up operation and maintenance departments to take charge of network maintenance services, and the telecommunications equipment manufacturers took charge of equipment and materials supply. Network optimization and service, project implementation is directly allocated according to administrative instructions.


In 1993, the global Internet industry ushered in a big outbreak. The demand for communication equipment increased rapidly, and the concentration of the industry declined. The market was booming. In 2001, the global Internet bubble began to burst, which directly caused the global demand for communication equipment to exceed the demand. Low-price competition in emerging markets has gradually penetrated into developed markets, and the market pattern has accelerated the reshuffle, to a certain extent, prompting the reorganization of Nokia and Siemens, Alcatel and Lucent. Communications giants have risen vigorously, and the communications industry has entered the era of winner taking and strong.


Now, after about two decades of silence, the telecommunications industry has finally ushered in a new opportunity for development. With the rapid rise of streaming media and the rapid growth of bandwidth demand, the construction of 5G is in full swing.


Looking back to communication industry for thirty years to embrace new opportunities in the 5G Era

Alliance stage (1985-1993 years)


In the initial stage of China's telecommunications industry, the whole industry is mainly fixed-line business, mobile business is still in its infancy, the global telecommunications equipment industry is almost monopolized by Lucent, Alcatel and Motorola three international giants. At that time, the market concentration index CR3 was as high as 70% to 75%, and communication technology was highly concentrated. The main characteristics of the industry are as follows: the income of the industry increases steadily, and the enterprises obtain monopoly profits through technology alliance.


Dispersion stage (1993-2001 years)


With the rise of the world's first generation mobile communications, and the rapid rise of Internet technology in the world, a large number of innovative companies have emerged worldwide, of which Cisco and Juniper are the most representative. Changes in technology and market have added network equipment to the industry, and together with telecommunications equipment and terminals constitute the two major markets for telecommunications equipment. It is in this stage that Chinese manufacturers have realized their own comprehensive competitiveness rapidly. With the increase of competitors, the market concentration began to decline year by year, but the industry's income still maintained double-digit growth because of the expansion of demand.


Accumulation stage (2001-2009 years)


With the collapse of the Internet economic bubble, the global communications equipment industry has ushered in the rapid contraction of market demand, resulting in the oversupply of communication equipment, and the growth rate of the industry has dropped sharply. From 2001 to 2003, the whole industry witnessed sustained negative growth, and the telecommunications equipment industry suffered unprecedented huge losses. Lucent, Alcatel, Motorola and Nortel grids have also suffered from this and have been unable to reverse the decline since then; 2004 and 2005 were the years when the telecommunications equipment industry recovered from the collapse of the network economy due to the transition adjustment, while 2006 and 2007 were the years of mergers and reorganizations of the global telecommunications industry. During the year, NOKIA merged with SIEMENS, Alcatel and lucent.


Concentration stage (2009-2017 years)


In 2010, the global economy bottomed out and the capital expenditure of telecom operators recovered. A new round of ICT industrial revolution, mainly smart terminals and cloud computing, began to emerge. Especially, innovative products led by smartphones and tablets have greatly changed human habits, leading to 2010 and 2011. The growth rate of the industry is more than 10%. The market pattern of terminal equipment is gradually concentrated in the front-line camp led by Apple, Huawei and Samsung. The market share of system equipment is gradually concentrated in Huawei. The clearing of production capacity has come to an end, and the concentration of the industry has been further enhanced. It has begun to enter an era in which the remnants are king, the winners are all-consuming and the strong are always strong.


Looking forward to the future


After more than 30 years of development, the telecommunication industry has been in a highly monopolized state. The new increment of the telecommunication equipment industry mainly comes from two aspects. On the one hand, the outbreak of 5G intelligent terminals, service robots, Internet of Things and other intelligent hardware such as VR / AR. On the other hand, the global 5G network will enter a substantial commercial stage in 2019, operators continue to increase investment in network construction. In addition, from network construction to cloud computing, artificial intelligence and other fields, the future will open up a broader market space.

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