Who has the brightest second curve?
The digital economy is surging, and the second curve business for digital delivery has become the main engine for the performance growth of China's basic telecom operators and the transformation and development of new technology companies. So, looking at the global market, what is the transformation of foreign basic telecom operators? Who has the brightest second curve? How "bright" is the second curve of Chinese operators from a global perspective?
Generally speaking, corresponding to traditional basic communication services such as voice, SMS, fixed-line broadband, and mobile phone Internet traffic, the second curve business mainly includes cloud services, computing power, Internet of Things, big data, industry digital application solutions, network information security, etc., which is regarded as a new digital delivery capability for basic telecom operators in the era of digital economy. In some markets, the second curve also includes other businesses that are different from the basic business, such as media, video, pay TV, Internet, and finance.
According to GSMA statistics, there are 1,250 mobile communication operators, 80 telecom operator groups and 4,600 commercial networks in the world so far. These carrier groups are China Telecom, China Unicom, China Mobile, NTT, SoftBank, KDDI, SKT, KT, LG U+, Telstra in the Asia-Pacific region, AT&T, Verizon, Comcast, and Chartered Communications in North America, and Deutsche Telekom, France Telecom, Telefónica, British Telecom, Telenor, and Turkcell in Turkey in Europe, all of which are at the top of global operators.
It should be noted that the fiscal year of NTT, Japan's SoftBank, KDDI, and Telstra is not a natural year, and in order to facilitate comparison, the "Communications Industry News" all-media has reorganized the performance of the above-mentioned operators in the form of a natural year, which will be different from the actual annual report data released by their respective operators. In addition, with the exception of Chinese operators, the performance of the remaining operators was compared with the conversion of foreign currency data into RMB data based on the market exchange rate of RMB against major currencies published by the China Foreign Exchange Trade System on January 2, 2024.
Japan, the United States and China are leading the way
The revenue data is a direct reflection of the operator's second-curve business development.
According to the annual report, the total revenue of the second curve business of the 20 major global operators reached 1.67 trillion yuan, with an average revenue of 83.6 billion yuan per operator. Among these 20 operators, there are 2 operators with revenue of more than 200 billion yuan, 4 operators with revenue between 100 billion ~ 200 billion yuan, and 4 operators with revenue of less than 10 billion yuan.
Among the top five operators in terms of revenue, there are two carriers in China and two in the United States, and one in Japan. Among them, the highest income in the second curve is Japan's NTT, with 294.3 billion yuan, the second is the United States' Verizon, with 213.2 billion yuan, the third is China Mobile, with 192.1 billion yuan, followed by the United States' AT&T and China Telecom. China Unicom ranked seventh with a revenue of 75.2 billion yuan.
Compared with the same period in 2022, among the 20 operators, 16 operators achieved growth in second-curve business revenue in 2023, while 4 operators decreased year-on-year. Among them, there are 2 operators with a year-on-year increase of more than 20%, 3 operators with a year-on-year increase between 10% and 20%, and 6 operators with a year-on-year increase between 5% and 10%. According to the data, the revenue of the second curve of most operators shows a medium-to-high-speed growth trend.
Among the top five operators in the second curve with year-on-year revenue growth, there are 3 operators in China, 1 operator each in Japan and Turkey. The operator with the highest year-on-year increase was NTT, reaching 25%; Turkcell ranked second with 20.3 percent, followed by China Telecom, China Unicom and China Mobile in three to five places. NTT's operating income increased by 3.7% year-on-year despite a significant decline in revenue from its traditional communications business, driven by strong revenue growth in the second curve. Turkcell's operating revenue increased by 14.6% year-on-year, while that of China Telecom, China Unicom and China Mobile increased by 6.7%, 5% and 7.7% respectively. The second curve business has become the main driving force for the performance growth of the above-mentioned operators.
Based on the financial data of the above 20 operators, the development of the second curve business of operators in China, the United States and Japan is more prominent, showing a three-legged trend. At the same time, except for AT&T and Telenor, the changes in the revenue of the second curve business of the remaining 18 operators have had a great impact on the rise and fall of the operating performance of the corresponding operators, highlighting that the second curve business has played an important role in the growth of global operators.
China Mobile is below the average line
The proportion of revenue reflects the high-quality development of operators' second-curve businesses.
Based on the financial data of 20 major global operators, in 2023, the proportion of second-curve business revenue of the above-mentioned operators in operating income will be 19.4% on average, which is close to 20% overall. Among them, there are only 6 operators that account for more than 40% of revenue, 6 operators that account for 20%~40% of revenue, more than half of the operators' second curve revenue accounts for below the average line, and even 3 operators account for less than 10% of the second curve revenue.
According to the data, among the 20 operators, the top five operators in the second curve revenue proportion are NTT, British Telecom, Telstra, China Telecom and Telefónica.
Analyzing the revenue structure of these five operators, NTT and British Telecom's personal business revenue is basically the same as that of government and enterprise services, and the ratio of Telstra's customer collection business revenue to personal business revenue is close to 3:5. Obviously, the second curve business of these three operators shows a high level of high-quality development.
Compared with the above three operators, there is still a certain gap between the three major operators in China. Among them, the ratio of China Telecom's second-curve revenue to basic business revenue is about 2:5, and the ratio of China Unicom and China Mobile's second-curve revenue to basic business revenue is about 1:3.
From a geographical perspective, the second curve business revenue of the three major Japanese operators accounted for an average of about 27.6%, the average second curve revenue of the three major Chinese operators accounted for 21.4%, the average second curve business revenue of the four operators in the United States accounted for about 15.6%, and the second curve business revenue of the six European operators accounted for an average of about 17.8%. Comparatively speaking, the overall level of the second curve business of Japanese and Chinese operators is basically in the first group, and the US and European operators are relatively close.
Judging from the revenue performance of the world's 20 major operators, in 2023, the second curve business development of the world's major operators is quite bright, and most of them have maintained medium-to-high-speed growth, but the proportion of revenue is generally not high, and the overall digital delivery service capability still has a lot of room for growth.
Guidance: Xin Wen
Written by: Superb
Chart: Dawn
Editing and proofreading: Superb
Acknowledgement: Provided in part by GSMA
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