China Mobile today published its 2019 annual financial report, stating that the company’s operating revenue reached CNY745.9 billion -a year-on-year increase of 1.2% – and its net profit was CNY106.6 billion ($15 billion) – a year-on-year decrease of 9.5%.
The fall in net profits was largely due to a spike in financing costs – up from RMB144 million ($20.2 million) to RMB3.25 billion ($460 million).
Operating revenue was just 1.2% higher, at RMB745.9 billion ($104.8 billion), while telecom services revenue improved by a meager 0.5%.
A few highlights:
- The largest China telecom network provider acquired 15.4 million 5G customers in the first three months after launch.
- In 2019, China Mobile’s mobile users increased by 25.21 million, reaching a total of 950 million. Its mobile Internet data traffic increased by 90.3% year-on-year and its mobile Internet DOU reached 6.7GB.
- Wireline broadband customers grew by 30.35 million to a total of 187 million.
- China Mobile’s family broadband users reached 172 million, an increase of 17.1% year-on-year. Its family broadband comprehensive ARPU reached CNY35.3.
- At the end of 2019, China Mobile’s government and corporate clients reached 10.28 million, a year-on-year increase of 43.2%. The company’s international business revenue saw a year-on-year increase of 31.4%.
Mr. Yang Jie, China Mobile’s Chairman of the Board said in the press release:
“We were faced with a challenging and complicated operating environment in 2019 where the upside of data traffic was rapidly diminishing and competition within the telecommunications industry and from cross-sector players was becoming ever more intense. Coupled with this was the impact of government policies, including the continued implementation of the “speed upgrade and tariff reduction.”
Against this backdrop, all of us at China Mobile joined together to overcome these hurdles and work towards our ultimate goal of becoming a world-class enterprise by building a dynamic “Powerhouse”. This was centred on the key strategy of high-quality development, supported by a value-driven operating system that leverages our advantages of scale to drive further convergence, integration and digitization across the board.
We structured our organization to enable effective and synergetic capability building and collaborative growth, while nurturing internal vitality. In addition, we further implemented our “5G+” plan to spearhead the development of “four growth engines”, comprising the “customer,” “home,” “business” and “new” markets. These measures have helped us obtain positive momentum in overall operating results, which was a hard-earned achievement for us in a tough year.”
Yang noted that the COVID-19 epidemic had driven more and more businesses and consumers online and encouraged greater takeup of digital and cloud-based services. “We will leverage these opportunities, as well as the 5G network, to further develop the information and communications services market.”
The “business” market was China Mobile’s new growth engine and we strove to nurture new growth points by fully leveraging our cloud and network convergence advantages, building on our DICT (data, information and communications technology) infrastructure comprising IDC, ICT, Mobile Cloud, big data and other corporate applications and information services. Buoyed by active promotion of our “Network + Cloud + DICT” smart services, customers and revenue recorded rapid growth.
As of the end of 2019, the number of corporate customers increased to 10.28 million, representing year-on-year growth of 43.2%.
Focusing on key sectors such as industry, agriculture, education, public administration, healthcare, transportation and finance, the company deepened go-to-market resources to promote DICT solutions that cater to sector-specific scenarios. This strategy has boosted DICT revenue to RMB26.1 billion, or growth of 48.3% year-on-year, contributing a larger portion of our overall revenue.
“5G+” Achieved a Good Start:
China Mobile sped up the development of 5G and have been fully implementing its “5G+” plan since June 2019, when we were granted the 5G licence. These initiatives have shown good initial results.
The company actively participated in setting international standards for 5G to drive technological development. It led 61 key projects in relation to 5G international standards setting and own more than 2,000 5G patents. It also helped to continuously strengthen the Standalone 5G (within 3GPP Release 15 and 16).
Its “six international standards (3GPP specifications are not standards) on 5G system architecture” and “38 international standards including 5G NR (New Radio) terminals and base station radio frequency” scooped all the top prizes in the 2019 Science and Technology Awards presented by the China Communications Standards Association, demonstrating our leadership in 5G communications standards.
At the same time, the company accelerated the implementation of “5G+” by formulating well- coordinated development of 5G and 4G. It constructed and began operating more than 50,000 5G base stations and launched 5G commercial services in 50 cities. Emerging technologies such as AI, IoT (Internet of Things), cloud computing, big data and edge computing were assimilated into 5G (5G+AICDE) and developed more than 200 critical capabilities, while making breakthroughs in over 100 5G joint projects.
In terms of 5G+Eco, we aimed to develop the ecosystem with other industry players. Through its 5G Innovation Centre and 5G Industry Digital Alliance, more than 1,900 partners were attracted.
The 5G Device Forerunner Initiative, guiding manufacturers to launch 32 5G devices, was established. The level of maturity was basically the same between the 2.6 GHz and 3.5 GHz industry chains. Benefiting from forward-looking planning and effective execution, we expanded 5G+X, where “X” stands for the wider application of 5G, in applications that have been adopted by a plethora of industry sectors, as well as the mass market. For the latter, we launched exclusive plans for 5G customers and feature services such as ultra-high definition videos, cloud-based games and full-screen video connecting tones. As of the end of February 2020, our 5G plans attracted 15.40 million package customers – maintaining an industry-leading position.
In terms of vertical sector, China Mobile explored the possibility of combining 5G with AICDE capabilities, extending collaboration in the industry and deep-diving into classic manufacturing scenarios to develop our leadership in 5G smart manufacturing, 5G remote medical services and 5G automated mining, among other sectors. A total of 50 group-level demo application projects were implemented.
Looking ahead, 5G presents infinite possibilities. China Mobile will continue to take a systematic approach to planning and steadily implementing our “5G+” initiatives. The company will speed up technology, network, application, operations and ecosystem upgrades, accelerate industry transformation by converging technologies, integrate data to strengthen information transmission in society, and introduce digitized management to build the foundation for digital society development. By doing so, China Mobile will seek more extensive 5G deployment, covering more sectors and creating greater efficiency and social value.