Demand for 5G service packages in China remained strong in May but new purchases of compatible handsets plummeted, widening a gap between the number of connected devices and users.
The three major operators in the country added nearly 31 million 5G package subscribers in May while data from a government statistics bureau showed device shipments of 16.7 million units.
China Academy of Information and Communications Technology (CAICT) reported overall smartphone shipments in May fell 30.8 per cent year-on-year to 22.6 million.
China Mobile added 16.7 million 5G package subscribers, taking its total to 222 million; China Telecom booked gains of 6.7 million (124.5 million); and China Unicom picked up 7.5 million (106.1 million).
The May figures indicate 54 per cent of new 5G subscribers acquired a compatible device. For the first five months of 2021, the percentage was 83 per cent: net 5G additions stood at 130.2 million, with 5G smartphone shipments reaching 108 million units, up 72.8 per cent year-on-year.
The May shipment numbers are down from 21.4 million in April and 27.5 million in March.
Gu Zhang, senior analyst at GSMA Intelligence, told Mobile World Live operators have been aggressive in offering “very attractive” consumer packages aimed at “locking in as many 5G customers as possible”, even if the local device market is not able to offer models at affordable levels for all segments.
China Mobile, for example, offers new 5G subscribers 30GB of data for about $20 a month, compared with the 20GB 4G users get for the same price.
With the price of 5G smartphones falling below $200, Gu expects the gap between devices and subscribers to shrink.
She said CAICT credited the decline in 5G device shipments to a slowdown in demand after triple-digit growth in the first quarter. The agency also said other handset vendors were unable to fill the gap left after Huawei’s shipments dropped.