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.

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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 cell 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%.

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.

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.

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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.

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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

https://techblog.comsoc.org/2020/10/21/china-mobile-has-114m-5g-package-subscribers-vs-204m-broadband-wireline-customers/

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

  1. First of all, the editor has correctly pointed out that no statistics or economic data from China’s government are trustworthy. That’s common sense and applies to all sectors of China’s economy, including telecom.

    Secondly, the reported increase of China’s 5G package subscribers was not the first 5G strategic hoax perpetrated by China. The reality is that the lack of any legitimate 5G use cases forced the CCP to lie about the success of 5G in order to fool the Chinese people (and the world). It is highly unlikely that people outside China will believe this fake 5G story.

    This seems to be similar to the origin of COVID-19 as per this YouTube video.

  2. The reported 5G investment data from China is doubtful. ‪I heard from a friend who works at China Unicom that even 4G investments needed an additional 10 to 15 years to complete. Now with 5G base stations being built, 4G investments are being wasted.

  3. China is expected to have 822 million 5G subscribers by 2025, up from 202 million subscribers at the end of last year, according to a recent report by the GSMA. The report, called “The Mobile Economy China,” also estimates that 5G connections by 2025 will represent 47% of total mobile connections in China, surging from current 12%.

    According to the GSMA, China will be one of the leading countries in terms of 5G adoption by 2025, only behind South Korea, with a penetration of 5G of 67%, the U.S. (55%), and Japan (50%).

    In terms of 4G connections, China will have a total of 911 million subscribers by 2025, down from the current 1.31 billion.
    https://www.rcrwireless.com/20210224/5g/china-reach-822-million-5g-subscribers-2025-gsma

  4. China’s big 3 telco revenues shrinks on discount 5G

    In the first two months of 2021, combined sales of mobile and fixed-line data services in China contracted by 1.2%, official figures show.

    The three state owned China network operators achieved aggregate revenue of 106.2 billion yuan (US$16.2 billion), accounting for 44.7% of total operating revenue.

    By comparison, in the corresponding period last year operators racked up combined data revenue of 107 billion yuan ($16.3 billion), a 4.3% improvement over 2019 and accounting for 48% of operating revenue.

    Growth in demand was strong, although down from 2019, with mobile data consumption up 31% to 30.9 billion GB. For the first two months of 2020 mobile traffic grew 44%.

    According to an analysis by website C114, the clue to the lower revenue is the fall in the unit price, down from 3.96 yuan per GB last year to 3.44 yuan.

    Despite the nearly one-third increase in data traffic “it is impossible to conceal the fact that the rapid decline in unit prices has led to a decline in revenue,” it says.

    Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.
    Since 2015, Chinese operators have been pressured annually by the Ministry of Industry and IT (MIIT) to drop prices in order to make Internet access more affordable and to drive the digital economy.

    That led to frequent bouts of excessive price competition until mid-2019 when the MIIT negotiated a truce.

    But the arrival of full 5G competition last year has rekindled the ultra-low price bundles, C114 says.

    The clearest sign of this is in the raw 5G numbers. As of the end of February, the telcos were claiming 361 million 5G package subs, whereas the ministry counts just 260 million genuine 5G customers.

    This huge 100 million subscriber gap is 4G customers who have been enticed to 5G plans by the low prices but are still using 4G phones.

    While the problem appears in the small sample of just two months’ data, there’s no sign of operators pulling back in the contest to grab 5G subs.

    This leaves the MIIT somewhat conflicted. Officials love to be able to report the record-breaking 5G numbers, but they also understand they must ensure operators can generate profits that attract investors and fund future network expansion.

    It seems only a matter of time before the MIIT steps in and brokers another peace agreement.

    https://www.lightreading.com/asia/china-data-revenue-shrinks-on-discount-5g/d/d-id/768477?

  5. Despite it still being in its early stage, 5G deployment in China is aggressive, allowing the country to be prepared to maintain/advance its position as the world’s leading industrial manufacturing nation and be ready for the next generation of the industrial revolution. ABI Research, a global tech market advisory firm, forecasts the 5G subscriptions in the Chinese market are expected to reach 739 million by 2025, which nearly takes up 40% world market share. In terms of the annual mobile data consumption, the 5G annual data traffic in China will reach 782 Exabytes by 2025, which has nearly 60% share of the world’s total 5G data consumption.

    “Unlike other early adopters, such as South Korea, the United States, Finland, Japan, and many others, Mobile Network Operators (MNOs) in China are owned by the government, which allow them to receive extensive support for developing the 5G networks especially in the consumer market,” says Jiancao Hou, 5G & Mobile Network Infrastructure Senior Analyst at ABI Research. “From a spectrum perspective, the MNOs received 5G spectrum licenses for tests and trials in 2018, giving them the great opportunity to plan the best network deployment strategies and be ready for the 5G commercial launch in the following year.” Moreover, “The current trade war and the ban of the Chinese domestic vendors isn’t slowing down 5G deployment in China, at least over the next 2 to 3 years, given its level of 5G deployment momentum.”

    According to ABI Research analysis and Chinese infrastructure vendor statistics, as of October 2020, 690,000 5G base stations in total have been deployed, and terminal connections have reached over 160 million. China Unicom and China Telecom are jointly deploying their standalone (SA) 5G RAN infrastructure and sharing radio frequency resources. On the other hand, China Mobile will continuously promote a dual-mode solution, i.e., Non-SA and SA, to better support international roaming, and its collaboration strategy with China Broadcasting Network is under discussion. Distributed Antenna Systems for indoor network deployment will continue for an extended period while small cell technology will be widely used to improve network capacity and coverage especially for mid and high band 5G spectrum. China Mobile is leading in the 5G enterprise business in China. Different industrial enterprise verticals will rely on MNOs to help deploy cellular networks due to spectrum attribution concerns.

    “There is no clear strategy guideline for promoting local licensed spectrum access or unlicensed and shared spectrum use in the Chinese telco market at the current stage,” Hou points out. Besides, “Considering the comprehensive fiber deployment across the whole country, Fixed Wireless Access and mmWave deployment may receive limited attention, except for traffic offloading in hotspots.” Moreover, the ban of the Chinese vendors’ development from other countries may stimulate the revival of the domestic supply chain in the Chinese market, and all tiers of MNOs, and many telco companies in China, show great interest in the Open RAN approach,” Hou concludes.

    These findings are from ABI Research’s 5G in China application analysis report. This report is part of the company’s 5G & Mobile Network Infrastructure research service, which includes research, data, and analyst insights. Based on extensive primary interviews, Application Analysis reports present in-depth analysis on key market trends and factors for a specific technology.

    https://prnmedia.prnewswire.com/news-releases/chinese-5g-subscriptions-and-data-traffic-will-reach-near-40-and-60-global-shares-by-2025-301258084.html

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