The total mobile service revenues in China are poised to grow at a compounded annual growth rate (CAGR) of 3.1% from US$131.3bn in 2021 to US$152.7bn in 2026, mainly supported by growing 5G subscriptions, according to GlobalData, a leading data and analytics company.
According to GlobalData’s China Mobile Broadband Forecast Pack, mobile voice revenues will decline at a CAGR of 5.2% between 2021 and 2026, due to falling voice average revenue per user (ARPU) levels. Mobile data revenues, on the other hand, will increase at a CAGR of 6.8%, driven by rising adoption of 5G services and the subsequent rise in data ARPU.
The three leading (state owned) network operators in China greatly increased their 5G CAPEX. China Mobile’s 2020 5G CAPEX totaled US$15.7bn (RMB 102.5bn), 57% of all CAPEX up from US$3.7bn (RMB 24.0bn) (14% of total CAPEX) in 2019.
Meanwhile, the combined 5G CAPEX of China Telecom and China Mobile, who are sharing 5G infrastructure, totaled US$11.3bn (RMB 73bn) in 2020, 48% of total combined CAPEX, up from US$2.7 (17.2 bn) in 2019 (13% of total combined CAPEX).
Harika Damidi, Telecoms Analyst at GlobalData, says: “5G subscriptions will surpass 4G subscriptions in 2023 and go on to account for 73.8% of the total mobile subscriptions share in 2026, driven by the ongoing 5G network expansion by operators and increase in the availability of 5G-enabled smartphones. Moreover, increasing penetration of IoT and M2M services are also expected to drive market growth during the forecast period.”
The average monthly mobile data usage is forecasted to increase from 9.9GB per month in 2021 to around 32.6GB per month in 2026, driven by the growing consumption of high-bandwidth online entertainment and social media content over smartphones.
Ms Damidi concludes: “China Mobile led the Chinese telecom market in terms of mobile subscriptions in 2020, followed by China Telecom. Moreover, China Mobile is the leading provider of 5G services which are poised to dominate the Chinese market in the future. In addition, the operator is making strategic investments in 5G base stations, data centers, industrial Internet, and IoT to ensure its leadership.”
According to GlobalData’s mobile broadband forecasts, by end of 2020 China and South Korea outpaced the world in adoption with 26% and 24% 5G subscription penetration of the population respectively compared to the Global penetration of 5% at the end of the same period. This rapid adoption is beginning to help operators in these markets grow revenue from mobile services and drive ARPU uplift in China and South Korea with overall 2021 mobile service ARPU expected to rise.
5G in China and South Korea are supporting both consumers and enterprise and even contributing to social welfare. On the consumer side new value and revenue streams for consumer 5G is being driven by next gen content like AR/VR experiences, the ability to stream 8K anywhere, providing multi-camera views for live events, offering dedicated gaming networks and new consumer IoT applications.
Enterprise networks are being deployed as an enabler for enterprise services alongside technologies like multi-access edge computing (MEC) and IoT platforms and industrial applications to support use cases like (industrial automation, AI video applications, drones, smart city). Often these enterprise solutions are supported by a combination of 5G, IoT and multi-access edge computing (MEC). China Mobile alone has entered contracts to construct dedicated 5G networks for private industry with 470 enterprise customers, in 2020. The company claims these projects support 15 different industry segments and represent over US$620m (RMB 4bn) in revenues.
Beyond typical consumer and enterprise services, 5G has supported the pandemic response in both countries, with hospitals in Wuhan being rapidly connected with 5G networks and telehealth for the elderly being delivered in South Korea.