In the past few years, the virtual operator model has finally received a formal commercial license after years of pilot programs. However, the initial pilot phase has now concluded, and the current telecom market is more competitive than ever. With internet-based packages offering more attractive pricing, traditional operators are struggling to stand out.
The mobile resale business pilot was launched in May 2013, with high expectations and great enthusiasm from all parties involved. At that time, it seemed like a promising opportunity, with many believing that "Qian Jing" (a term often used to describe a large number of users or revenue) would be easily achieved. But as time passed, the reality proved to be far more complex. Numerous challenges emerged, leading to a decline in interest and participation over time.
By the end of 2017, the Ministry of Industry and Information Technology reported that 13 resale companies had achieved profitability for the first time that year. A total of 42 private enterprises had launched mobile resale trials across nearly 200 local networks in 29 provinces, with user numbers exceeding 60 million. The ministry stated that the pilot program had met its goals and that the conditions for formal commercial operations were now in place.
Additionally, the mobile resale business is now open to foreign-invested enterprises, further expanding the competitive landscape.
It has been more than three years and eight months since the pilot began, and although this period was long enough to reshape the industry, the formal commercial license came only after a long wait.
Even with the official launch, the telecom market continues to grow increasingly competitive. Operators are under pressure to reduce prices and increase speed, which puts even more strain on smaller players. Some private broadband operators have already gone bankrupt, and private enterprises are finding it difficult to compete with both traditional operators and internet companies. Virtual operators face similar challenges.
While some companies have managed to gain a foothold, their advantages are not always clear. For instance, at a recent China Unicom mobile resale business promotion meeting, Zhou Renjie, General Manager of China Unicom's Supervision Affairs Department, revealed that China Unicom's mobile resale business has over 45 million users, maintaining a net increase of tens of millions each year. Its market share is around 73%.
This means that most of the mobile resale users in the market are affiliated with China Unicom. While China Mobile and China Telecom have not released specific figures, their combined user base is estimated to be less than 15 million.
However, it’s also worth noting that China Unicom’s Tencent King Card has surpassed 50 million users, growing rapidly from just over 20 million in May 2017. This shows strong growth potential, especially as the service is now available to existing users and will continue to expand in the future.
Meanwhile, Ali Communications recently ranked among the top three for spam messages and harassment calls, leading to an investigation by the Ministry of Industry and Information Technology. This highlights the challenges faced by new entrants in the market.
When comparing tariff packages, it's evident that internet-based plans have significant advantages over traditional ones. For example, the 4G Enjoyment Card offered by Snail Mobile appears less appealing when compared to the Tencent King Card, which offers better value and flexibility.
As more internet companies enter the market with competitive packages, the pressure on traditional operators and virtual businesses is increasing. With the demographic dividend fading and traffic demand peaking, breaking through in this saturated market is becoming more challenging.
“There is no clear path forward for virtual operators once they get the commercial license,†said independent telecom analyst Fu Liang. “It’s definitely not through tariffs or services alone.â€
The future of virtual operators remains uncertain, but innovation and differentiation may hold the key to survival in an increasingly crowded and competitive telecom landscape.
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