Character Interview | Li Honglin: C-Data Is Ready To Face Changes

From May 28th to 30th, 2021, CCBN2021 officially held in Beijing. As a well-known exhibition in the radio and television industry, industry insiders pay much attention to it. Today, we invited the invited guest of the exhibition: Li Honglin, the executive deputy general manager of C-DATA, to talk to us about the experience of this trip.

1. After participating in this CCBN2021, what is your deepest feeling?

【The industry has entered a bottleneck period. Under this circumstance, who can adapt to the changes and find new product and business directions, who will usher in new opportunities; the living space of traditional enterprises that follow the old fashioned and unprepared will be narrowed】

In CCBN2021, some familiar small and medium-sized enterprises unexpectedly did not come to the exhibition, indicating the bottleneck of the industry and the differentiation of enterprise development.

CCBN is mainly an exhibition in the radio and television industry, while the traditional radio and television market is based on the province as the smallest operating network, unlike China Telecom, China Mobile, and China Unicom, which are operating systems that are one network across the country. In the past, small and medium-sized enterprises still had opportunities. However, as the operating investment of provincial-level radio and television network companies slowed down, the living space and market opportunities for small and medium-sized enterprises were significantly reduced. From the perspective of budget control, many companies at this exhibition did not come.

At the same time, when the Ministry of Industry and Information Technology issued the 5G license, it also issued a 5G license to China Broadcast Network, which is building a nationwide network, which is often referred to as a 700MHZ 5G license. This is a good opportunity for the original telecommunications and mobile equipment suppliers, especially leading companies such as Huawei and ZTE. They want to transplant their capabilities, business models, and products from telecom operators to broadcasting and television. However, since it is still in the early stages of development, there is still a period of in-depth discussion on specific issues such as how to build the network, how to cooperate, and how to proceed with the next step of market promotion. Judging from the importance attached to this exhibition by companies such as Huawei and ZTE, they should be making advance arrangements.

For small and medium-sized enterprises, it is either to withdraw, or to make a breakthrough, or to shift to differentiated market segments. C-Data’s subsidiary Wuxi Leihua, which is in charge of domestic radio and television, won bids in many provinces and cities across the country in 2020, which shows that we have the ability to make breakthroughs. At the same time, we are also engaged in optical transmission DWDM products, smart city products, home network products, etc. Multiple market segments are advancing side by side, digging deeper into demand and expanding the living space.

2. What impact do you think the epidemic has on this exhibition and the development of the industry?

【The epidemic has a great impact on the exhibition and the industry】

The epidemic has a greater impact on this exhibition, because travel is restricted during the epidemic, and considering safety reasons, the number of customers who come to the exhibition is less than expected. But for all customers who can be there, we can find some excitement to conduct in-depth communication and discuss opportunities for follow-up cooperation. In the past, many international customers came to the exhibition. This time due to the epidemic, international customers were unable to come to the exhibition. For customers who are unable to be present, we try our best to communicate through voice and video chat tools, which not only introduce the exhibition situation but also collect market demand.

The impact of the epidemic on the development of the industry is different at home and abroad.

The domestic epidemic is well controlled, so the impact on the industry is not much felt, and the overall market is stable. However, due to the epidemic in foreign countries, the demand for broadband access, broadband lines, and expansion of transmission bandwidth has increased rapidly, so the market demand for broadband network equipment is increasing.

The epidemic has had a major impact on the entire upstream supply chain. The shortage of chips and supporting materials and the increase in prices are a huge test for communication equipment manufacturers. Some companies with small size, weak anti-risk capabilities, and poor supply chain management capabilities will fall behind. Due to the advance judgment of the situation, C-Data has maintained the stability of upstream resources in the case of material shortages in the market, and can meet the order needs of long-term cooperation value customers. However, it is difficult to meet the order delivery of some new customers and small customers. The short-term turbulence of the epidemic will not change the long-term trend of the industry, and will help outstanding companies grow bigger and stronger.

3. Are there any industry hotspots in the near future? What do you think of these hot spots? What impact do you think these hot spots will have on us?

【From the perspective of operators, the industry has encountered bottlenecks and overall revenue growth has slowed down. Operators hope that manufacturers can form strategic partnerships with them and develop markets with them.

From the manufacturer’s point of view, the manufacturer’s focus is on speed, and more consideration of C-oriented products and solutions. 】

For manufacturers, the overall market environment has changed considerably in the past 10 years and 20 years ago.

In the first 20 years, China’s communication network was relatively backward, so there was no need for equipment manufacturers to actively promote it. Operators themselves had a strong demand and driving force for investment in network construction. People also needed video, voice, broadband, and video, and the market demand existed objectively.

In the past 10 years, our equipment manufacturers have to run faster and more actively, to invent, create, and promote some advanced solutions, actively attract operators to purchase, build, and invest, and promote operators to improve their business and services. Sell to businesses and consumers. Because the highway is getting wider and wider, the revenue growth slows down for the operators, and there is no novel experience for the common people. It is nothing more than a faster speed and the cheaper the toll, the better, so the manufacturer can do it. The main thing is bandwidth acceleration, it is difficult to have killer applications like smartphones.

From a wireless perspective: switching from 4G to 5G, various needs can be extended from the different application scenarios of 5G;

From the perspective of the home: WIFI6, 10G fiber to the home appears for home access. This is the bandwidth acceleration of different application scenarios.

At the same time, there is also a need for expansion of the trunk network: now it is from 100G to 200G, and it may be 400G or even 1T in the next one or two years.

On the other hand, operators are also worried. Operators hope that manufacturers will not just promote products blindly, but from their perspective, provide more B-side and C-side solutions. The operator hopes that you can tell him that the products and solutions you provide can help him make money in which industry and market direction, and then he has a greater willingness to invest.

Because the payback period of traditional communication equipment is long, it takes about 5 years, but after the acceleration of product iteration, operators are a bit resistant and overwhelmed by the cost pressure of the bandwidth acceleration process. Therefore, operators hope that manufacturers can form strategic partnerships with them and develop markets with them.

Faced with such a market situation, C-Data will naturally not lag behind. For example, our newly established business units and subsidiaries are actively developing and promoting related products and solutions such as smart software, DWDM transmission and network security storage, rather than a simple single product status.

4. As a manufacturer of communication equipment, what advantages do you think we have?

【First of all, we have a strong manufacturing and R&D team. Secondly, being able to develop to the current state in just a dozen years shows that we have also found our own gameplay in terms of team combat effectiveness, market comprehensiveness, and supply capabilities. 】

Our main advantage lies in: We have a strong manufacturing and R&D team. At the same time, there are nearly 20 years of market and experience accumulation in the industry.

Over the years, as the unicorn companies at the head have grown larger, the growth and opportunities for the second and third tier companies have become less and less. C-Data’s ability to reach the current scale in just a dozen years shows that we have found our own gameplay in terms of team combat effectiveness, market comprehensiveness, and supply capabilities.

In terms of expansion, similar to Huawei’s early years of competing with foreign counterparts and adopting the strategy of encircling cities from rural areas, you are the leading country and operator, and I am the country and customer you did not do. Customers of different sizes will also seek the right products, cost-effectiveness and after-sales service.

But in the differentiated market segments and products, the competitiveness is actually converging, mainly depending on the strategic layout of the operators.

In fact, the operator does not want a certain equipment supplier to dominate the rivers and lakes, so that it becomes Party B commanding Party A. If the operator has a personalized demand for network reform, the need for customization is completely controlled by the supplier, so They want to be diversified.

5. As a communications equipment manufacturer, what do you think we can improve?

【Own original product improvement, brand building, product line diversification】

First of all, it must be the improvement of its own original products, so there is no need to say more about this.

Secondly, it is brand building.

In fact, the communications industry has changed from a high-tech industry to a basic industry. With the increase of capacity, the accumulation of products and technologies, there is a process of transforming cocoons into butterflies from quantitative changes to qualitative changes, rather than simply saying that he can do what I cannot do. That is to say, my current ability and level are there, but my brand is not as good as yours. I cannot reach the comprehensiveness of my market layout and product solutions. Therefore, brand building is particularly important.

Finally, the product line is diversified.

There is now such a trend: the original leading companies in the communications industry or the leading companies of large IT companies are using their original R&D capabilities and manufacturing capabilities to move toward smart terminals, home appliances, enterprises, and related software. Hardware extension, plus one's own understanding of a certain type of product, to cross-border.

A typical example is the success of the Internet industry. It is equivalent to saying that the operator is making the road wider and wider. He is a road repairer and we are a provider of sand and gravel cement. However, the operator only earns tolls. Then who builds the cars on the road? Who makes more? Therefore, try to diversify your product line as much as possible.