Blog: China operator H1 2018 scorecard – Mobile World Live

Blog: China operator H1 2018 scorecard

21 AUG 2018

China’s 4G penetration continued to climb, hitting 73.6 per cent after the big three added 212 million LTE subscribers in the year to end-June, taking the total to nearly 1.1 billion.

Market leader China Mobile led the march with 83 million 4G additions year-on-year (see chart left, click to enlarge), followed by China Telecom (65 million) and China Unicom (64.2 million).

China Mobile’s LTE penetration increased from 69 per cent in H1 2017 to 74.7 per cent at end-June, while China Telecom’s jumped from 66 per cent to a market-leading 77 per cent.

Data from GSMA Intelligence showed China accounted for 29 per cent of the world’s 4G net additions in the 12 months to end-June, with the country home to 37 per cent of global LTE connections.

Strong growth
All three state-run companies recorded healthy financials in H1, with net profit and service revenue rising across the board. Due to strong data growth, both China Unicom and China Telecom generated 10 per cent growth in mobile revenue, which was up only 1.1 per cent at China Mobile.

The three also all suffered sharp falls in 4G ARPU as they took steps to comply with a government policy to boost speeds and reduce mobile tariffs by 30 per cent this year.

China Mobile and China Telecom are cutting back on capex after investing heavily in 4G and fibre infrastructure, respectively forecasting 6.4 per cent and 15.5 per cent declines in spending for the full year. While China Mobile is reducing its overall network budget, the percentage devoted to mobile is forecast to rise to 41 per cent this year from 36.7 per cent in 2017.

With the country’s lowest LTE penetration (67 per cent), China Unicom continues to play catch up in 4G and expects to increase capex to CNY50 billion ($7.3 billion) from CNY42 billion in 2017. It targets adding another 50,000 4G base stations in H2 after deploying 60,000 in the opening six months, which took its total to 910,000.

5G efforts
In their interim statements, the operators talked generally about continuing to “proactively” conduct 5G tests in the second half of 2018 and “facilitating the efficient collaboration” of the new technology with current 4G network resources.

China Mobile was by far the most pragmatic, with its chairman Shang Bing insisting: “We are keen to generate returns on our investments and will plan our future investments on 5G taking into consideration the level of maturity of the industry and business models that emerge.”

None of the operators issued an update to their previously announced plans to have commercial launches by the end of 2020. Initial 5G launch plans will focus on a limited footprint of dense urban centres to test network efficacy and consumer take-up levels before commitments are made to roll out into suburban and rural areas.

With their dense 4G networks, comprising millions of base stations, the big three can afford to wait to see how 5G matures in the first wave of rollouts around the world.

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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