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How high is the traffic fee in China? 40% more expensive than the EU, 14 times more than India

via:CnBeta     time:2018/6/12 8:01:54     readed:183

Since China Unicom launched the “unlimited” ice cream package at the beginning of 2017, the three major domestic operators have launched “unlimited” competition one after another. However, these unconstrained packages all have different levels of restrictions, which mainly include restricting the speed of access beyond a certain amount of usage. Take China Mobile’s “Renyixing” as an example. After using an unlimited package of 88 yuan in excess of 10GB of traffic, the Internet speed will drop from a maximum of 300Mbps to 1Mbps.

The most prominent country in the world with “unlimited traffic” is Finland. The country's largest operator, Telia, has an unlimited package price of 29.9 euros (about 225 yuan). Finnish users can use 4G networks without any restrictions, and the maximum rate is 300M. In contrast, China Mobile's retail price of 238 yuan for the Bank of China package, traffic threshold is 40GB, after the highest speed of 40GB, 1M. In addition, Telia also has unlimited speed limit of 100M, 0.2M unlimited packages, priced at 24.9 euros, 6.9 euros. Telia has more than 3 million users in Finland and accounts for about 60% of Finland's total population.

Thanks to the real unlimited amount, Finland has always led the wave of global traffic. In 2016 and 2017, Finland's per capita traffic usage was 10GB/month and 20GB/month respectively. During the same period, China's per capita traffic usage was 770MB/month and 1775MB/month respectively.

According to a survey released recently by Rewheel, a telecom consultancy in Finland, Finland is also the country with the lowest unit price of traffic in the world. In April 2018, the unit price of Finnish traffic was 0.2 Euro/GB, which was about 1.5 Yuan/GB. In China, according to the Ministry of Industry and Information Technology, in December 2017, the Chinese traffic price dropped to 26 yuan/GB, which is equivalent to 17 times that of Finland.

Prices exceed EU 40%, 14 times more expensive than India

Similar to the unit price of traffic in Finland, it was only in India that 4G was officially launched in 2016.

According to data released recently by India's TRI, in 2017, the average traffic volume in India was Rs 19.35/GB, which was equivalent to Rmb 1.84/GB. In this calculation, the Chinese traffic price was 14.13 times that of India.

In 2017, India had 1.167 billion mobile subscribers, of which 238 million were 4G subscribers. Total traffic usage increased from 4.642 billion GB to 20.092 billion GB, an increase of 332%, but its total traffic income increased from 355.8 billion rupees to 3888. Billion rupees (about 37.1 billion yuan), an increase of 10%. In the same period, China's total traffic consumption was 24.6 billion GB, and the total traffic income was 588.9 billion yuan.

India almost stepped into the 4G era, and the main reason was attributed to the "free" operator Jio for more than half a year. Jio is affiliated with Reliance Group, India’s largest privately-owned group, and officially provided 4G services on September 5, 2016. Unlike all other operators in the world, Jio has only 4G services and announced "free" promotion directly at the beginning of its expansion business. By February 2017, it took only 170 days. Jio has developed 100 million 4G users, then stopped the free strategy, but still carried out business at extremely low prices.

According to the Reliance Group Financial Report, in 2017, Jio’s 4G business revenue was Rs 239.16 billion, which represented a profit of Rs. 31.74 billion, and in US dollars it was US$ 3.67 billion and US$ 487 million, respectively. Among the 238.3 million 4G users in India, Jio accounted for 186.6 million, accounting for 78%.

It should be noted that since India only has a total of 670,000 4G base stations, it bears 20 billion GB of traffic and the network is relatively congested. In addition to the Jio download rate of 17.9 Mbps, the remaining operators are all lower than 10 Mbps, and the network stability is poor. In contrast, China has more than 3 million 4G base stations, and its network quality and coverage are all far ahead.

In fact, China's traffic price is not only higher than Finland and India. According to Rewheel data, the average price of French traffic is 0.8 Euro/GB, which is 4.6 Yuan/GB. The average price of 28 EU countries in November 2017 is 2.4 Euro/GB, which is 18.3 Yuan/GB, and the average traffic volume in China is higher than that in the EU. 42%. The average flow in the OECD region is 2.9 euros/GB, which is also lower than China.

The Rewheel report corroborates with the "Mobile Broadband Prices in Europe 2017" issued by the European Commission. The report counts the prices of the 28 EU countries before June 2017.

In the EU 28 countries below 10GB of the flow package, the cheapest package is the Super Internet package provided by Italy's Wind Tre, its 5GB pure traffic price of 3.64 euros, 10GB traffic price of 5.7 euros. Wind Tre is an Italian mainstream operator with 30 million mobile users. The lowest price for 20GB traffic is the business launched by Tele 2 in Estonia at a price of only 11.2 euros. The above packages are all mainstream packages. In addition, a number of resident people in Spain, Germany, and France told reporters that "when consumers run out of traffic every month, most operators will limit their rates, but they will not charge extra fees."

The average price of the 5GB, 10GB, and 20GB packages in the 28 EU countries is 12.66, 21.77, and 33.12 euros, respectively. These prices are lower than or equal to China Mobile's 2017 equal traffic flow package price. In 2018, China Mobile significantly reduced the price of optional package for traffic, which was already lower than the EU's average price in 2017, but it was still higher than the EU's 2017 lowest price mainstream package, and it is uncertain whether it is lower than the EU's price in 2018.

"Limiting factors" in fierce competition

Since 2012, China has repeatedly promoted the speed of broadband adoption and mobile network speed-up and fee-reduction projects.

However, the price of mobile traffic has always been high.

In India and the European Union, competition is the most important factor in driving price declines. India has always been regarded as the country with the most tragic telecommunication competition. More than 13 operators in the country are fiercely competing. Jio's free access allows India to step into the 4G era. In the EU, each country has a number of major international operators competing, and there are a large number of small virtual operators.

Domestic competition is not without competition. Even in many areas, domestic competition is far more intense than international competition. However, there are many "restrictive clauses" in the domestic telecommunications industry to control market competition in local areas.

In 2015, Premier Li Keqiang of the State Council stated in the first-quarter economic situation forum that “traffic fees were too expensive”, kicked off the fee reduction, and then clarified the five major measures to increase speed and reduce fees. In 2015, the average tariff rates for fixed broadband and mobile traffic decreased by more than 50% and 39%, respectively. In 2015-2017, the average traffic volume in China dropped from RMB 100/GB to RMB 26/GB. Per capita traffic increased from 400MB/month to nearly 2GB/month.

During this period, in addition to directly reducing the package price, operators began to present users with a large number of local-only traffic packages, and introduced large-scale package services such as “Wangka”. In many emerging packages, traffic prices have been low. To 2 yuan/GB. However, the local traffic is only applicable to the city and the province, and it cannot be used across the country. New services such as Wangka are only applicable to new users. Old users cannot always handle the traffic.

The restrictions on “local traffic” and “old users may not handle” have become a safe haven for the domestic telecommunication market. They are only applicable to the “2 yuan/GB” low price of emerging users and cannot impact the national market.

Unlike in China, in the EU, there is no "local traffic" restriction within a single member state. And since users can carry numbers to the Internet, with the exception of individual packages that are launched for "under 28s" and "foreign users", the vast majority of businesses are applied to everyone. These policies can ensure that the effects of market competition are maximized.

On March 5, 2018, the government work report once again urged the speed increase and fee reduction, and requested that the “roaming” fee be cancelled during the year, and that the mobile tariff should be reduced by at least 30% during the year, significantly reducing broadband charges. The Ministry of Industry and Information Technology has publicly stated that there will be no difference in national traffic flow before July 1. At present, only the “new and old users have different rights” and “number portability” are the only factors that restrict market competition. Once the policies in these areas are further improved, the unit price of domestic traffic still has room to fall.

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