As of August 21st, the first half data of the three major telecom operators have been released, showing that China Telecom's revenue was 266 billion yuan, a year-on-year increase of 2.8%; China Unicom reached 197.3 billion yuan, a year-on-year increase of 2.9%; China Mobile reached 546.7 billion yuan, a year-on-year increase of 3%. In terms of net profit, China Telecom's net profit attributable to the parent company reached 21.8 billion yuan, China Unicom 6 billion yuan, and China Mobile 80.2 billion yuan. The "second curve" and 5G are still the focus of market attention, representing the development potential of each company. In the industry's view, although the three companies have different performances, they are facing the same problems, namely, the increasing uncertainty of new business, the increasing number of competitors, and the need to refine the promotion of 5G. At present, the competition focus of operators has quietly shifted from "scale" to "strategy". There is still room for the "cornerstone" business in terms of scale. The situation where China Mobile leads and China Unicom and China Telecom closely follow has not changed, but there are still areas worth pondering in the semi annual report data. As the three companies are transforming into new businesses, the main business of communication seems to have weak growth and few highlights. However, in the semi annual report, China Telecom, the smallest in scale, has the fastest growth in its main business, reaching 4.3% year-on-year, significantly exceeding China Unicom's 2.7% and China Mobile's 2.5%. In terms of net profit growth, China Mobile, the largest company, lags behind, with a year-on-year growth rate of 5.3%, which is not as good as China Telecom's 8.2% and China Unicom's 10.9%. If we look at EBITDA profit, which is the profit before interest, tax, depreciation, and amortization, China Mobile experienced a year-on-year decline of 0.6%, while China Unicom and China Telecom increased by 2.7% and 4.7% respectively. China Telecom has become a "dark horse", which may indicate that traditional businesses still have room for value exploration. This can be seen from the ARPU value, which stands for "average revenue per user". China Telecom was only 46.2 yuan in the same period last year, but now it has increased to 46.3 yuan. It is crucial to tap into the potential of user traffic. Communication industry observer Fu Liang analyzed to Beijing Business Daily reporters that China Telecom's mobile basic communication service revenue reached 87.1 billion yuan in the first half of the year, a year-on-year increase of 1%, and the growth should mainly come from mobile internet traffic. Compared with the data disclosed by the Ministry of Industry and Information Technology, the cumulative traffic of China Mobile, China Telecom, China Unicom, and Radio and Television reached 164 billion GB in the first half of the year, a year-on-year increase of 12.6%. During the same period, the total mobile internet traffic of China Telecom users increased by 28.2% year-on-year, significantly outperforming the market trend. Experts point out that for the "cornerstone" of communication services, operators have not yet reached the point of "lying flat". In terms of customer acquisition speed and scale, it is indeed not as good as before, but there is still room for operators to refine their package and tariff strategies. Behind the increase in ARPU value is a wider range of package options. A company should not only include high traffic packages, family integration packages, and other products, but also provide low threshold daily rental cards and a rich product line to help stabilize profits and expand customer sources. At present, both the upper and lower limits of each company need to be further expanded. How the development of the "second curve" of telecom operators affects market attention beyond the traditional communication business of the "second pillar". According to the data of the Ministry of Industry and Information Technology, in the first half of 2024, three basic telecom enterprises will actively develop emerging businesses such as IPTV, Internet data center, big data, cloud computing, and the Internet of Things, with a total revenue of 227.9 billion yuan, accounting for 25.5% of the total revenue, an increase of 10.5% over the same period in 2021. However, in terms of revenue proportion, traditional business revenue still accounts for three-quarters, and the proportion of new business is relatively small. The "second curve" is far from becoming the "second pillar". More noteworthy is that the growth momentum of emerging businesses has weakened. Taking China Unicom as an example, its cloud service revenue in the first half of the year was 31.7 billion yuan, an increase of 24.3% year-on-year, but the growth rate slowed down compared to 2023, with a growth rate of only about 2.1% in networked communication. For operators, emerging businesses are inevitable, but they are also somewhat confused. Independent international strategy researcher Chen Jia pointed out that the growth based on user scale has encountered bottlenecks, and operators must transform towards digitalization. However, in the context of unclear technological direction and uncertain return cycles, how to evaluate and value emerging sectors is still a difficult question for the market to answer. Unlike standardized behaviors such as building base stations, attracting customers, and selling packages, "network intelligence" requires more personalization and customization, and operators have to bear more development costs and face more unpredictable returns. Moreover, the market landscape is uncertain, and the three major telecom operators need to compete with companies like Huawei and ZTE. The advantage of the latter lies in its more solid technological accumulation, such as Huawei's "Ascend 910" chip, which supports the Ascend processor series products and is widely used in data centers. It can provide full stack AI service computing power from chips to the cloud, covering all layers of computing and storage. ZTE also has a complete chain from chips to 5G core networks. Because of competition, investment is more important than making money for the current three major telecom operators. In 2024, China Telecom plans to invest 18 billion yuan in cloud computing and computing power, with a cumulative intelligent computing power exceeding 21EFLOPS, to comprehensively build an AIDC that is flexible, resilient, and green for intelligent computing. China Mobile announced that its computing power expenditure plan for 2024 is 47.5 billion yuan, an increase of 21.5% compared to 2023, accounting for 27.5% of the total capital expenditure budget. The company plans to accelerate the diversified supply of computing power, with a total of 9EFLOPS for general computing power and over 17EFLOPS for intelligent computing power, ensuring a leading position in the industry in terms of scale. From the latest data in July, it can be seen that China Mobile is still leading the 5G wave. Currently, its customer base is about 528 million, China Telecom is 340 million, and China Unicom's "Big Connect" users are about 1.078 billion. Among them, the cumulative number of 5G package users is 279 million, and the number of IoT terminal connections is about 573 million. For the number of 5G users, the statistical standards of operators have repeatedly changed, making it difficult to observe their service quality. After China Unicom proposed the "big connectivity" indicator in 2022, in June of this year, China Mobile also adjusted its statistical caliber from "5G package users" to "5G network customers". It seems difficult for the three major telecom operators to expand their 5G customer base, and the "5G uselessness theory" is also constantly heard. Since the issuance of 5G licenses in November 2019, four years have passed completely. Compared with the first four years of 4G license issuance, 5G is indeed inferior. Fu Liang believes that although 5G has not brought explosive growth from a data perspective, it is not useless. On the contrary, the traffic shared by China's current 5G network has exceeded 50%. The number of people who shut down 5G networks and unsubscribe from 5G packages is decreasing, and when the 5G network load is high enough, the cost advantage will further become apparent. Experts say that the reason why the presence of 5G is not as strong as 4G is partly due to the different stages of network development in China, and partly because there have been no killer applications in the 5G era. Operators are focusing more on the application of 5G in the political and business fields. While promoting 5G, 5G-A has also arrived. China Mobile told Beijing Business Daily reporters that compared to 5G, 5G-A has the characteristics of higher speed, larger connection, and lower latency. The company has been committed to accelerating the iteration and innovation of 5G-A technology, leading the development of 60 5G-A international standards, launching the world's largest 5G-A commercial network deployment in over 300 cities within the year, and planning to promote the launch of more than 20 5GA terminals in the industry chain, developing over 20 million 5G-A terminal users. China Telecom told Beijing Business Daily reporters that its 5G-A will provide high reliability remote control, high-precision data collection, low-cost ubiquitous IoT solutions for customers in industries such as low altitude economy, manufacturing, energy, and warehousing. Experts point out that in order to further tap into the potential of 5G, it is necessary to balance the relationship between commercial and personal use. The two are not interchangeable, but should complement each other. For example, operators can promote the application of 5G in virtual reality, network training, remote work, cloud terminals, and other fields through traffic subsidies, strategic cooperation, and other means. In other words, after all, mobile phones are not the only channel to experience 5G. (New Society)