Repositioning Business Objectives
In the years leading up to 2013, Sichuan Telecom had to deal with an issue facing many telecom companies. On one hand, the industry was up against severe competition from traditional broadband and mobile users. On the other hand, new IPTV services offered by telecom carriers presented new challenges, as they risked being amalgamated with broadcast, TV systems and other service providers. At that time, Sichuan Telecom was having to compete against various threats, from broadband, to mobile and IPTV. It needed a way to provide a richer, more valuable experience for its customers, and it needed a way to improve its pipeline capacity and competency without becoming a pure pipeline.
In 2013, Sichuan Telecom initiated a new transformative strategy named “zero-one-two” to try to forge a new direction and increase their value. “Zero” referred to the free HD video programming that was to drive business; “one” referred to the single fiber optic cable as business’ core; and “two” referred to a pair of mobile phones, symbolizing the focal point of the company’s products offerings. The strategy focused on the needs of an average household consumer, with mobile video the main selling point. By doing so, video user volume increased, which in turn boosted fiber optic broadband and mobile Internet business. Sichuan Telecom had enacted a comprehensive reform of planning, construction, operations and maintenance to positioned video as its core business.
Building the ultimate 4K experience
In order to provide customers with the best 4K experience, Sichuan Telecom has been cooperating with Huawei since 2012 to optimize its network architecture and increase speeds. The partnership also helped increased bandwidth and flux, making 100MB broadband and visual management for video a reality for household users.
By consistently updating its video offerings, Sichuan Telecom was able to transform itself from a telecom carrier offering traditional services – such as live broadcast and video-on-demand – to an OTT service, merging rich video content and imported Blu-ray, 3D and 4K video. Through a step-by-step and stage-by-stage developed network and CDN collaborative construction, resource allocation was able to be optimized. The resulting increase in fluency and resolution revolutionized the video watching experience. In just three years, Sichuan Telecom’s IPTV users increased from 720,000 to 4.3 million.
Crucially, Sichuan Telecom further identified the need for upstream and downstream cooperation for this transformation to work, so varying video formats could be adapted to different applications. In 2014, Sichuan Telecom cooperated with numerous device manufactures, telecommunication equipment manufacturers, and audio and video content suppliers to form a 4K ultra HD industry alliance. The aim was to promote a more complete industry chain with better cooperation among companies across the industry.
4K video to usher in an era of new value chain
Sichuan Telecom has positioned HD video as its engine, directly boosting the growth of its broadband and mobile business. Income from TV value-added service increased threefold from late 2013 to late 2014 and lowered the risk of losing customers. In 2014 Sichuan Telecom estimates that their HD video service helped them retain 700,000 broadband customers. For potential new users, meanwhile, the new services on offer made the signing up a more attractive proposition. Single port ARPU, for example, was bigger than traditional TV and Internet videos, which makes telecom IPTV use more engaging.