Shulou(Shulou.com)11/24 Report--

Original title: "contract machine, pawn!" "

Source: Lei Tech Digital 3C Group | Editor: a Tian Ming | typesetting: autumn

I wonder from what channel do people usually buy mobile phones?

Because of its high reliance on Apple Care + services, Xiao Lei's iPhone is generally purchased or "refilled" year after year in Apple Store. Android mobile phones also choose the brand's own sales channels because of the forerunner or brand membership system. Only when buying mobile phones for relatives will choose the e-commerce platform with tens of billions of subsidies because of budget requirements. On the other hand, Xiao Lei's friends prefer the freezing price of the e-commerce platform and have not considered the brand-owned channel with better price.

But in addition to paying "IQ tax" to mobile phone brands or risking a "battle of wits" with third-party stores, the mobile phone market once had a third option: operator contracts.

In the era of zero yuan purchase of mobile phones in China, when it comes to contract phones, the first thing that comes to mind is the contract phones in the United States and Japan. There is one saying that these two major mobile phone markets have indeed made great achievements in the channels of operators. Even today, some friends still say to Xiao Lei that they "envy American contract phones."

But in fact, the concept of contract machine has also been popular or even popular in the domestic market: before 2002, mobile phone sales were mainly on a prepaid basis. After all, the real-name system will not be implemented until a decade later in 2013, when people only need to pick a number they like at a newsstand or snack bar and buy a phone that matches the standard.

The different sales systems of mobile phone numbers and mobile phones allow consumers to buy their favorite products at lower prices, but this is not necessarily a good thing for operators. The separate sale of mobile phones means that operators can only get revenue from consumers in the form of phone bills, and the complex mobile number card distribution system also makes operators have to hand over part of their profits to the sales channel.

On the one hand, there is a mobile phone sales market that makes a lot of money, and on the other, the monthly rent is less than 10 yuan, and the number card market, which needs to make profits by such small means as hidden deductions, is naturally red-eyed by operators. And operators sell mobile phones in person has also become the inevitable outcome.

But if you have read the Story of PHS that we reviewed before, you should be impressed by the unique mobile phone market at that time: the "middle-end mobile phone market" sandwiched between high-end and low-end phones was almost completely occupied by parallel mobile phones smuggled into the country. Although the quality of these phones is uneven, nine times out of ten there is no warranty, and even most of them do not support Chinese input, sales of parallel-imported phones are still strong in the face of real price concessions.

And these lawless "outlaw fanatics" have naturally become the biggest obstacle for operators to enter the mobile phone sales market: if they do not reduce prices, users might as well go directly to Nokia and Motorola stores to buy the latest phones; if prices are reduced, operators will not be able to fight a price war with smuggled mobile phones that do not pay tax. In this two-sided situation, operators learn the secret of breaking the game from their overseas counterparts-contract machines.

Photo Source: in Samsung2002, China Mobile first launched the contract phone service, under the contract mode: users need to promise the minimum monthly consumption to get a discount on mobile phone prices, and some of the purchase money will be "refunded" to consumers in the form of pre-deposited phone fees. In some cases, as long as consumers promise a higher minimum consumption, they can waive all phone purchase payments in the form of pre-deposited phone charges, thus realizing the so-called "zero yuan purchase".

This novel way of buying phones had a great impact at that time, and it changed the situation that operators could only rely on phone charges to earn income in the domestic mobile phone sales system. It is true that a large part of your "phone purchase" has been converted into the balance of the user's phone bill, but the low threshold of the package has turned the prepaid phone bill into another form of installment payment-it is not accurate to say that this is an installment payment, because the essence of the installment is to pay a monthly fee, while the deposit phone fee is the full payment in advance at the beginning.

After China Mobile, China Unicom, China Telecom and other operators have launched their own contract phone business, facts have proved that this "pre-stored phone fee" and "zero yuan purchase" gimmick has indeed attracted a lot of users. Taking the data in China Mobile's 2003 performance report as an example, the sales revenue of China Mobile's SIM cards and mobile phones was about 3.33 billion yuan in 2001, 3.64 billion yuan in 2002, and directly exceeded 5.3 billion yuan in 2003.

Picture source: although in China Mobile's performance report, "the income from the sale of SIM cards and mobile phones is recognized when the goods are delivered to the buyer, due to the small amount after deducting the cost of goods sold, it is included in other net income". Take the performance report of China Mobile in 2003 as an example, compared with the data in 2002, the "net other income" has only increased from 1.639 billion yuan to 2.464 billion yuan, which is not worth mentioning in the face of hundreds of billions of yuan of expenditure and income.

It is not difficult to see that the essence of the contract machine is that the operator bundles users and high-consumption packages with long-term contracts through the way of early profit concession and telephone fee guarantee. However, the emergence of the contract machine still accelerates the transformation of the identity of operators and enhances users' perception of the brand of operators.

However, with the deepening of public awareness of the contract machine, the loopholes in the contract machine mechanism are also exposed to consumers.

First of all, more and more consumers are beginning to realize that the contract machine is not cheap. Take the iPhone contract machine launched by China Unicom as an example:

At that time, the contract price of iPhone 4 was 3699 yuan, and Unicom offered 10-stage 24-phase contract packages ranging from 66 yuan to 886yuan. Among them, if users apply for a 66-yuan 24-phase package, as long as they deposit 1400 yuan in advance, they can buy iPhone 4 at a "preferential price" of 2299 yuan. But if you have a package with a monthly fee of 228 yuan or more, you only need to deposit 3699 yuan in advance to take your cell phone with you.

Photo source: China Unicom looks like a bargain, right, but don't forget that the monthly fee of 226yuan has to be deducted for 24 consecutive periods, the actual phone bill is guaranteed to be 5424 yuan, and the deposit after deducting 3699 yuan also needs to make up 1725 yuan. If you directly handle the 886 yuan package with a big wave of your hand, the total monthly fee for two years will be as high as 21264 yuan. Indeed, the 886 yuan package has 3000 minutes of call time and up to 4GB traffic. But for operators, the cost of supporting 3000-minute calls and 4GB traffic is not 10 times higher than that of supporting 160min 220MB traffic.

In other words, you think you've made money, but the operators are laughing.

But soon things took a turn for the better: we knew that the nature of the contract machine was a means for operators to "trap" consumers in a short-term way. But if consumers sell the iPhone subsidized by the operators at the market price, how should the operators respond?

You should know that the real-name system of mobile phones did not come into effect until October 2013, and that the arrears of mobile phones will not be included in credit information until 2020, coupled with the fact that not all contract phones need to deposit phone bills in advance. As soon as the contract phone is sold, the mobile phone card is sold or thrown away directly, and this mobile phone has nothing to do with me. And at that time, the contract machine did not need any face authentication, some mobile phone stores only need an ID number, do not produce the original can handle the contract machine.

For operators, the transformation from "contract machine" to "contract-breaking machine" is extremely serious, which is equivalent to operators directly paying for tens of billions of subsidies to the second-hand mobile phone market. In addition, at that time, many enterprises and institutions would subsidize their employees' telephone expenses, and many people would apply for the contract machine within the scope of the subsidy. After getting the mobile phone, they directly sold the contract phone, which was tantamount to subsidizing other mobile phone users with the money of the operator.

Photo Source: Veer

In the face of the impact of the "contract breaking machine", some operators are unable to sit still and begin to restrict users from using contract machines and contract cards separately in a variety of ways. As domestic mobile phones enter the 3G era, the three major operators operate their own 3G network bands, so they also begin to restrict the mobile phone networks used by contract phones in the name of "custom phones".

For example, a certain operator has lowered the network priority of mobile phone cards of other operators on mobile customized machines. For example, when the customized machine of operator A recognizes the mobile phone cards of the two AB operators, it only allows users to use the mobile phone cards of operator A to surf the Internet, and some even directly restrict their own contract phones to use their own brand mobile phone cards.

Yes, this kind of restriction is actually the network lock that American and Japanese operators are very familiar with. In fact, most of the so-called "American version locks" in China are actually American version "breach machines", which require users to disguise Chinese SIM cards as mobile phone cards of specific US operators through card stickers, so as to bypass the network locks of the contract machines for domestic use.

But why can we only see the so-called American card stickers and Japanese card stickers but not the cards of Chinese operators? The reason may be unexpected-we don't need stickers because we take up legal weapons:

In 2017, regulators received a report that an operator used a "castration machine" (software to restrict the use of phones that can only use specific operators' networks) to deprive users of their freedom of choice. In 2019, the State Administration of Market Supervision and Administration launched an investigation into the "specific sales behavior of customized 4G + mobile phones that may constitute unfair competition" by a provincial branch of an operator. In order to "hide from the limelight", operators no longer use network locks to restrict the breach of contracts, whether they like it or not.

And at this time, the domestic e-commerce platform is developing rapidly, mobile phone brands can directly touch consumers in a more convenient way, the subsidy of ten billion yuan of e-commerce platform is often greater than that of operators, and consumers' demand for the contract machine itself is getting smaller and smaller.

In addition, the continuous decline of basic communications revenue and the demand for fee reduction have also weakened the voice of operators from both internal and external angles. Instead of using a contract machine to start a price war again, it is better to use broadband bundling to increase user stickiness from another dimension and increase long-term income.

When we can buy the desired "lock-free phone" from the e-commerce platform in a more flexible way and at a more favorable price, who needs a contract machine?

The contract machine is not dead, but no one misses it. The review of the contract machine is coming to an end here, but while collecting information, Xiao Lei found that the contract machine did not completely retire from the stage of history in 2023. He even "renewed" his life in another way.

According to the worker's Daily, some operators will recommend users to upgrade their packages by marketing e-commerce and under the guise of getting their phones for free. However, once users are attracted by the gimmick of taking mobile phones for free, they are basically pawned and often have to pay high package fees.

When this routine is implemented, users will not be required to pay for their mobile phones in a lump sum, but they will be required to apply for a card package that costs a lot of money per month, or even ask you to open the installment business of a flower or other small loan company. At that time, you will have to pay a high monthly rent or installment fee.

Yes, this is still the routine of the contract machine. But the difference is that this time the operator not only requires you to pay the phone bill in advance, but also induces users to "deposit" the phone bill in the way of network micro-loan.

Photo source: Lei Technology, for example, in an operator's online official mall, this Y78 + phone with a price tag of 1999 yuan can be purchased for 1 yuan, and four-in-five is equal to giving away for free, but only if the monthly rent is 199 yuan. The contract period is two years.

It is worth noting that the preferential amount of 1998 yuan enjoyed by users needs to be paid in installments, and the principal interest shall be paid by the operator. Xiao Lei guessed that the process of repayment should be that after the user pays the monthly rental fee, the operator will repay the official loan to Hua Bai. In addition, the amount of 1998 yuan of users' flowers will be frozen and will not fully return to normal until the end of the contract period. If the amount of spending is less than 1998 yuan, you will not be able to participate in the activity of purchasing a machine for 1 yuan.

Operators promote this kind of business of buying phones at a low price or 0 yuan. To put it bluntly, they want to use this as bait to pack their own high-priced 5G packages.

The construction of 5G network has cost operators a lot of money, and they are eager to get back and forth by peddling 5G packages. Public data show that the three major operators have invested more than 400 billion in the 5G sector. However, 5G has so far failed to bring killer application scenarios, and concepts such as industrial 5G have not been realized, and the communication fees of mobile phone users are still their main source of revenue.

The resurgence of the "zero yuan purchase" is just the bait for some operators to induce users to sign high phone bills. To be sure, with the further decline of operator revenue, this kind of "zero yuan purchase" trap will only become more and more common. If you want to put an end to this situation, readjusting the position of operators in the communication system may be the best way.

The contract machine, which is burdened with notoriety, is only a negligible victim in the transformation of operators.

This article comes from the official account of Wechat: Lei Technology (ID:leitech), author: Lei Tech Digital 3C Group

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