Former Board Chairmen Of China Mobile Guangdong Joins Alibaba: Internet Companies Have Become The First Choices When Choosing A New Career Path
Telecom carriers have finished their marketization. However, in contrast to the marketized business, the salary system remains intact with little change. Therefore, Internet companies have become more competitive when it comes to choosing a new career path.
Former board chairman of China Mobile Guangdong Zhong Huatian’s joining Alibaba as the VP has erupted heated discussion among telecom carriers. The Internet industry, on the contrary, remains extremely calm about it. I personally know a lot of friends from the telecom industry as well as some Internet industry insiders. Apparently, similar things have taken place in the Internet industry for many times. This might be an exploding news in the telecom industry but not in the Internet industry, which in some way shows the talent pools these two industries have.
Zhong Tianhua joined Alibaba and was appointed as the vice president that reports directly to the CEO Zhang Yong, the no.2 employee of Alibaba only second to Jack Ma. Zhang Yong is in charge of core businesses such as Tmall, Taobao, and JUHUASUAN etc., also with the right of competency over YunOS, Aliyun, DingTalk, and Xianyu etc. Rumor has it that after joining Alibaba, Zhong Tianhua will greatly boost lines such as IoT, DingTalk, as well as enterprise-level products such as Aliyun, which explains why Zhong is answering directly to Zhang Yong.
Besides enterprise and industry-level applications, Alibaba also has a virtual network operator line called Aliqin and 3C e-commerce lines that compete with JD.com. These business lines are more or less linked to telecom carriers, and that’s why Alibaba needed Zhong Tianhua’s industry experience and network to help them take off. Last year, former general manager of China Mobile Guangdong, vice president of Suning’s virtual network line, vice president of 360’s hardware industrial chain line, and CBO QIKU, Pan Zhiyong’s joining Tmall as the vice president also proves this point. At present, Pan Zhiyong is in charge of the 3C sector.
Pan Zhiyong and Zhong Tianhua have both worked in Zhejiang province for many years, one of the reasons why they chose Alibaba specifically. A little known fact is that Zhong Tianhua was Pan Zhiyong’s superior at China Mobile Guangdong in some way for a short time. In August 2013, Zhong Tianhua was transferred to China Mobile Guangdong while Pan Zhiyong handed in his resignation in early 2014. After joining Alibaba, Pan Zhiyong and Zhong Tianhua might not have a reporting relationship but might have some cooperation together.
More people are leaving the telecom industries these days
China Mobile Guangdong’s mid-level and high-ups are leaving the company to join Alibaba, which showcases the tendency of high quit rate of China Mobile. China Mobile Guangdong is the most important provincial branch for the company, with its data business, IoT business and terminal business topping the country. Besides Zhong Huatian and Pan Zhiyong who have great connection with the Internet industry, many employees of China Mobile Guangdong have left the company for Internet companies like Tencent, YY, Ant Financial, Didi and Uber etc. There is actually a WeChat chat group for these former employees of China Mobile Guangdong, which is about to reach the user limit.
During the past years, the quit rate of China Mobile Guangdong has been going up. Six years ago there were little contract workers at China Mobile Guangdong while there are more and more in recent years. What’s worse, more senior staff are also leaving the company and the exit of the board chairman has set up a new record.
People exited from China Mobile Guandong for different reason, but still they also share a common ground.
Many people will think that this is a sign that shows China Mobile is going downward. Four years ago, the emergence of OTT aplications such as WeChat etc. brought up a great stir in the industry with many people believing that telecom carriers were about to go out of business. Telecom carriers themselves on the other hand were also worried about apps like WeChat and fought against them. However, time has proven that such worries were unnecessary as telecom carriers have undergone a transformation through data operation and are benefited greatly from it.
According to China Mobile’s 2015 Fiscal Report, the company’s revenue in 2015 was ¥668.3 billion, a 2.6% year-on-year growth; profit for the shareholders was ¥108.5 billion, a 0.6% slump. Furthermore, the mobile dataflow increased by 143.7% while the dataflow of usage of mobile users jumped by 118.5% compared with last year. Income generated from the Wi-Fi business had a 30.5% growth, a total of ¥200.9 billion. The latest statistics from China Mobile on the operation in May show the number of 4G users has hit 409 million.
4G network’s expansion has exceeded the world’s expectation and it’ changing the entire mobile Internet scene and the competition. The rise of the content sector, live-steaming apps, IoT and even mobile payment has been accelerated by 4G technology. Telecom carriers, powered by 4G network, are forming Internet genes and thrive together with Internet companies. Despite this prosperous scene, talents are still choosing to leave for Internet companies. What has gone wrong exactly?
Talents are leaving while new blood is not entering the industry
It’s no denying that Alibaba and Tencent, two ever-growing Internet giants, also have a relatively high quite rate, probably even higher than that of telecom carriers. The flow of talents is actually a good thing for both the enterprise and the industry since it’s just like the circulating blood. Only when the blood is circulating can the industry have a more competitive, innovative and prosperous environment and the company have more opportunities to upgrade itself.
The flow of talents in the Internet industry has nurtured the head hunting industry that has grown to a large scale. Besides that, vertical job-hunting sites such as Lagou etc. are also brought by the surge in talent flow, making the Internet industry truly a hub of innovation and fortune.
However, the challenge for telecom carriers is the exit of talents surpasses the enter of talents. The reality is we don’t really see a senior executive from the industry industry joining a telecom carrier, or a telecom carrier poaching talents from Internet companies.
Perhaps ten years ago working at a state-own enterprise like a telecom carrier would guarantee pretty much your material life with lots of benefits, but today telecom carriers have finished their marketization while the salary system remains intact with little change. Therefore, Internet companies have become more competitive when it comes to choosing a new career path.
China Mobile Guangdong last year gave out a big year-end bonus, which is incredible rare for China Mobile, to its staff. However, compared with Internet companies’ even higher bonus that’s usually the sum of a couple months’ salary, China Mobile Guangdong’s bonus just isn’t competitive enough. Worse still, it’s not just the challenge of having difficulty keeping talents that telecom carriers are facing. According to an insider, China Mobile is having trouble attracting talents as well, as the company even has problem recruiting graduates from 985-level universities.
Internet giants, especially BAT, have better working environment and brighter career growth system in addition to their high salary, bonus and shares. Furthermore, they tend to be more appealing to young talents as well as the internal teams for their focus on talents.
Internet giants in general give you promotion according to your performance, your achievements, which is more transparent and more convincing for most people. Therefore, telecom carriers might also need to make its talent system more Internet too. If one day senior executives from the HR department of Internet companies start to join telecom carriers, profound changes might take place. In fact, telecom carriers have already noticed their issues and are making endeavors to fix them.
China Mobile Guandong for example has set up a incubator similar to startup incubators of the Internet industry to encourage the staff to kickstart their startup projects internally. But still, to keep current talents and attract future talents, it’s far from enough. More efforts will have to be made by telecom carriers.
[The article is published and edited with authorization from the author @Luo Chao, please note source and hyperlink when reproduce.]
Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.
Originally published at www.tmtpost.com on September 13, 2016.