MIIT: China has 260M 5G subs; Telecom business revenue significantly increased

China telecom regulator MIIT (Ministry of Industry and Information Technology) revealed this week that China has 260 million 5G subscribers at the end of February 2021.  That is a huge number and more than the rest of the world combined [1.], but still a long way short of the 361 million claimed by the three operators. in February.

  • China Mobile reported 173.2 million 5G package customers compared to 15.4 million 5G customers in February 2020.  China Mobile’s overall mobile subscriber base was said to be 937.16 million at the end of February, down from 940.86 million in January.
  • China Telecom added a total of 6.2 million 5G subscribers in February 2021 for a total of 103.4 million.
  • China Unicom had 84.5 million 5G subscribers at the end of February 2021.

Note 1. GSA says that global 5G subscriptions grew by 57% in the fourth quarter of 2020 to reach nearly 401 million globally (representing 4.19% of the entire global mobile market).  By the end of 2025, 5G will account for 31% of the global market (at 3.39 billion subscriptions), although LTE will still be dominant at 53.3% of all global mobile subscriptions.

……………………………………………………………………………………………………………………………………….

China’s vice-minister of industry and information technology Liu Liehong recently said that a total of 718,000 5G base stations have been built in China, accounting for nearly 70% of the world’s total 5G sites.

During Mobile World Congress Shanghai 2021, government officials said that Chinese carriers have invested more than CNY260 billion ($40.2 billion) to build the world’s largest 5G network.

MIIT further stated:

The growth rate of telecom business revenue has increased significantly. From January to February, the total revenue of telecommunications services reached 237.3 billion yuan, an increase of 5.8% year-on-year, and the growth rate increased by 4.3 percentage points year-on-year. The total telecommunications business calculated at the constant price of the previous year was 249.1 billion yuan, a year-on-year increase of 25.9%.

Figure 1. The cumulative growth rate of telecom business revenue and total telecom business from January to February 2020-2021

The scale of mobile phone users is basically stable, and 5G users are developing rapidly. As of the end of February, the total number of mobile phone users of the three basic telecommunications companies reached 1.592 billion, a year-on-year increase of 0.8%. As of the end of February, the number of 5G mobile terminal connections of the three basic telecommunications companies reached 260 million, a net increase of 61.3 million from the end of the previous year, accounting for 16.3% of mobile phone users.

Light Reading’s Robert Clark wrote: “The three (China) telcos’ annual filings over the past two weeks indicate that between them they spent a hefty 173 billion yuan ($26.5 billion) on 5G and they’re not slowing down; they’ve set aside another 185 billion yuan for 2021.”

“Their pricing, with plenty of encouragement from government officials, is also aggressive, with China Mobile’s 5G entry package costing just 128 yuan ($19.56). The heavy investment and the moderate pricing in pursuit of national objectives is why their results indicate little reward for the effort so far.”

MIIT also commented on other telecom services (besides 5G):

Data and Internet business revenue accounted for 60%, supporting the steady growth of overall telecom business revenue. From January to February, the three basic telecommunications companies completed fixed data and Internet business revenues of 41.5 billion yuan, a year-on-year increase of 10.2%, accounting for 17.5% of telecommunications business revenues, accounting for a year-on-year increase of 0.8 percentage points, driving a 1.7 percentage point increase in telecommunications business revenue . The revenue from mobile data and Internet services showed a decline for the first time. The completed business revenue was 106.2 billion yuan, a year-on-year decrease of 1.2%, and its share of telecom business revenue fell to 44.7%.

Fixed and mobile voice services declined steadily, and their share of telecom business revenue continued to decline. From January to February, the three basic telecommunications companies completed fixed voice and mobile voice business revenues of 3.82 billion yuan and 18.64 billion yuan, a year-on-year decrease of 1.1% and an increase of 5.0%, respectively, accounting for 9.5% of the total revenue of telecommunications services, and a decrease of 0.1%. Percentage points. The rapid growth of income from emerging businesses has strongly promoted the growth of telecom business income. The three basic telecommunications companies are actively transforming and upgrading, promoting IPTV, Internet data centers, big data, cloud computing, artificial intelligence and other emerging businesses. From January to February, they completed a total of 36.2 billion yuan in related business income, a year-on-year increase of 28.9%. The proportion increased sharply by 2.8 percentage points year-on-year to 15.3%, driving the growth of telecom business revenue by 3.6 percentage points.

The proportion of fixed broadband access users with speeds above 100M has exceeded 90%, and the number of gigabit users has continued to increase. The total number of fixed Internet broadband access users reached 492 million, a year-on-year increase of 8.9% and a net increase of 8.67 million from the end of the previous year. Among them, there are 463 million FTTH/O users, accounting for 94% of the total number of fixed Internet broadband users. The number of fixed Internet broadband access users with an access rate of 100Mbp and above reached 450 million, accounting for 90.4% of the total number of users, an increase of 0.5% from the end of the previous year; the promotion of gigabit broadband services was accelerated, and the access rate of 1000Mbps and above was fixed. The number of Internet broadband access users reached 8.03 million, a net increase of 1.63 million over the end of the previous year.

Mobile Internet traffic increased significantly, and DOU remained at a relatively high level in February. From January to February, the cumulative mobile Internet traffic reached 30.9 billion GB, a year-on-year increase of 31.8%. Among them, the Internet traffic through mobile phones reached 29.7 billion GB, a year-on-year increase of 31.2%, accounting for 96% of the total mobile Internet traffic. In February, the average mobile Internet access traffic (DOU) per household was 10.85GB/household, which was 1.97GB/household higher than the same period last year.

Figure 5. Cumulative mobile Internet access traffic and growth rate from January to February 2020-2021

The penetration rate of fixed broadband access users of 100M and above tends to be even in all regions. As of the end of February, fixed broadband access users of 100Mbps and above in the eastern, central, western and northeastern regions reached 189.68 million, 11.17 million, 116.57 million and 26.74 million, respectively, accounting for 89.3. %, 91.7%, 90.8% and 91.8%. The difference between the highest proportion of fixed broadband access users above 100M and the lowest proportion in each province was 15.3 percentage points.

China Unicom and China Telecom say nearly a quarter of their mobile customers are on 5G plans.  Chna Unicom boosted ARPU 4%, while China Telecom reported 5G ARPU nearly 50% above its blended ARPU.

China Mobile reported a 1% rise in profit but, despite the huge 5G subscriber base, recorded another decline in mobile ARPU.One winner for China Mobile was broadband access, which grew 17%, while China Telecom and China Unicom both experienced large increases in their smart home services.

………………………………………………………………………………………………………………………………………

Editorial Comment:

Many experts don’t trust economic numbers released by China’s government. Questions over the accuracy of China’s economic data, including industry groups like telecom, persist due to the lack of transparency used in the collection process. Critics say the government does not state how the data is collected or the different components that form the final numbers that are released to the public.

The methodology China uses to calculate its economic and industry data is opaque, and some knowledgeable people even accuse the government of abruptly changing methods without announcement to distort figures and hide declines.

The motivation seems to be to make China’s economy and industry groups look much stronger than they really are.

Most analysts treat any official Chinese data with caution and skepticism.  Yet they have few, if any ways to establish an alternative, more accurate assessment of the world’s second-largest economy.

…………………………………………………………………………………………………………………………………………..

References:

https://www.miit.gov.cn/gxsj/tjfx/txy/art/2021/art_82f101e1d078447fac75443a50348b7c.html

https://www.lightreading.com/asia/china-5g-race-taking-its-toll-on-operators/d/d-id/768369?

https://gsacom.com/paper/lte-and-5g-subscribers-march-2021-q4/

https://www.rcrwireless.com/20210323/5g/chinsese-carriers-add-almost-17-million-5g-customers-february

Source link