Analysis: LTE continues climb in China as ARPU slides - Mobile World Live

Analysis: LTE continues climb in China as ARPU slides

23 AUG 2019

Mobile operators in China signed up another 142 million 4G subscribers over the past 12 months (to end-June), taking LTE penetration to 78.3 per cent with an incredible 1.24 billion subs.

Average monthly data usage jumped sharply at all three operators to more than 7GB. China Mobile saw the largest year-on-year gain, with consumption more than doubling from 3.1GB to 7.1GB.

The three companies – China Mobile, China Unicom and China Telecom – earmarked a combined CNY302 billion ($42.8 billion) for capex this year (for a reference point, the two mobile players in the Philippines plan to raise capex significantly to $2.7 billion in 2019).

China Unicom, in danger of slipping to number three behind China Telecom after its rival boosted subs 15 per cent (see chart below, click to enlarge), is the only player planning to substantially increase capex this year. Its capex is set to rise 29 per cent to CNY58 billion. China Mobile’s 2019 budget is down slightly to CNY166 billion, while China Telecom will increase network spend by 4 per cent to CNY78 billion.

In addition to the country’s staggering 4G sub and capex numbers, China now has a total of 5.58 million 4G base stations. China Mobile added 300,000 to take its total to 2.71 million; China Telecom has 1.52 million; and China Unicom installed 180,000 to end the period with 1.35 million.

5G acceleration
In their H1 earning statements, all three highlighted plans to accelerate 5G deployments after licences were issued in June, developing non-standalone and standalone (SA) networks concurrently with SA as the ultimate goal.

China Mobile has the most aggressive 5G plans, saying it will deploy 50,000 base stations in more than 50 cities by the end of 2019. China Unicom and China Telecom each aims to install 40,000 5G sites this year, also targeting up to 50 cities.

In emerging businesses, the country is seeing brisk uptake of IoT services.

China Mobile’s H1 revenue from IoT increased 43.8 per cent year-on-year to CNY5.2 billion, as it added 142 million IoT smart connections to take the total to 693 million at end-June. China Telecom grew connections 79 per cent to 133 million, increasing IoT revenue 52 per cent to CNY1.09 billion.

China Unicom didn’t reveal IoT revenue or number of connections, merely disclosing it has 200,000 NB-IoT base stations.

On the down side, the top two players experienced continued weakness in mobile, with China Mobile posting a double-digit drop in profit, while all three suffered declines in ARPU of at least 10 per cent.

The companies still managed to generate a combined profit of CNY76.9 billion, or $10.9 billion, in the January to June period – not bad for a sector the market leader’s chairman suggested is “almost saturated”.

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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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