Telecom in China
China adds 20M “5G package” subscribers in July; 1H-2024 earnings gains outpace revenues for all 3 major China telcos
The number of 5G subscribers in China increased by a sizeable 20 million last month, according to new data from the country’s big three state owned network providers (China Mobile, China Telecom, China Unicom). Of the three, China Mobile is still the only one to report actual customers using its 5G network; China Telecom and China Unicom are sticking to their 5G package subscribers metric, which essentially means customers signed up to a 5G plan, regardless of whether they use 5G network services (most continue to use 4G).
- China Mobile’s July net adds came in at 13.7 million, pushing its 5G customer base up to a colossal 528 million. China Mobile disclosed that it has 129 million customers using its 5G New Calling over high-definition video service reached 129 million, of which, smart application subscribers numbered 11.82 million.
- China Telecom added 3.1 million 5G package customers for a total of 340 million. They did not talk about 5G in their earnings report (more below).
- China Unicom added 2.9 million 5G package customers for a total of 279 million. China Unicom shared details of its 5G network build-out, pointing out that its 5G mid-band base stations numbered in excess of 1.31 million as of mid-year, while low-band sites reached 780,000.
For each of them, cloud and digital transformation (rather than 5G subs) drove topline growth, profit rose more than revenue and shareholder returns increased.
- China Mobile said net profit had improved 5.3% to RMB80.2 billion ($11.2 billion), outpacing revenue, which rose 3% to RMB546.7 billion ($76.6 billion).
- China Telecom, reported net earnings of 21.8 billion Chinese yuan (US3.1 billion), an 8.2% gain over last year, with revenue up 2.8% and service revenue 4.3% higher.
- China Unicom reported 11.3% higher net income of 13.8 billion ($1.93) on the back of a 2.9% lift in sales to RMB197.3 billion ($27.6 billion).
China Mobile says its digital transformation business grew 11% to RMB147.1 billion ($20.6 billion), accounting for 26% of all revenue. China Telecom reported digital industry sales of RMB73.7 billion ($10.3 billion), a 7% increase, and China Unicom said revenue grew 7% to RMB43.5 billion ($6.1 billion).
Source: Cynthia Lee/Alamy Stock Photo)
All three state owned telcos experienced double-digit growth in cloud services. China Telecom’s Tianyi Cloud grew revenue by 20% to RMB55 billion ($7.7 billion), while China Mobile Cloud hiked sales by 19% to RMB50 billion ($7 billion) and China Unicom grew 24% to RMB32 billion ($4.5 billion).
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Silence is Golden?
There was a distinct lack of 5G commentary in China Telecom’s half year report; it is the last of the three to post numbers and did so alongside the publication of the market’s operational statistics for July. The telco shared its 5G package figures – it added almost 18 million in the first six months of 2024, incidentally – but made no other reference to the technology in a fairly wordy statement about its year-to-date performance. Instead, the operator focused on the progress of its digital transformation strategy, leaning heavily on the promise of artificial intelligence. Specifically, China Telecom is talking up what it terms AI+ – there’s always one – and the Xingchen large language model it launched at the back end of last year.
“The Company strengthened the integration and mutual promotion of capabilities in various fields, continuously enriched the Xingchen large model series product portfolio, empowered the intelligent transformation for thousands of industries, and supported enterprises to achieve costs reduction and efficiency enhancement,” it said.
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References:
https://www.telecoms.com/5g-6g/china-added-20-million-5g-subs-last-month
https://www.lightreading.com/finance/cloud-digital-transformation-drive-chinese-telcos-h1-growth
GSMA: China’s 5G market set to top 1 billion this year
MIIT: China’s Big 3 telcos add 24.82M 5G “package subscribers” in December 2023
China Telecom and China Mobile invest in LEO satellite companies
WSJ: China’s Telecom Carriers to Phase Out Foreign Chips; Intel & AMD will lose out
China’s telecom industry business revenue at $218B or +6.9% YoY
ZTE reports H1-2024 revenue of RMB 62.49 billion (+2.9% YoY) and net profit of RMB 5.73 billion (+4.8% YoY)
China’s ZTE reported a 2.9% rise in total revenue to RMB62.5 billion ($8.76 billion), with net profit attributable to holders of ordinary shares of the Hong Kong listed company at RMB 5.73 billion, up 4.8% year-over-year (YoY). The biggest growth surge was in the corporate and government unit, which boosted revenue by 56% to RMB9.2 billion yuan ($1.29 billion), mainly through stronger server and storage sales. However, that was offset by a 68% hike in costs, depressing the gross margin by 5.7 points – a result of “changes in revenue mix,” the company said.
The company’s core carrier network equipment business declined 8.6% in the first half of 2024, holding back underlying earnings to 4.96 billion Chinese yuan (US$700 million) – a gain of just 1.1% over last year. The carrier unit, which accounted for 60% of the company’s total revenue, brought in RMB37 billion ($5.18 billion) in sales in H1, the company revealed in its stock exchange filing.
ZTE said demand from Chinese telecom operators had been constrained by “overall investment sentiments,” but it pointed to improved sales of indoor distribution, high-speed rail and metro networking equipment. ZTE’s consumer business, which includes mostly handsets and home routers, grew 14% to RMB16 billion ($2.24 billion). R&D spending remained flat at RMB12.7 billion ($1.78 billion).
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Source: Cynthia Lee/Alamy Stock Photo
China’s domestic market accounted for 69% of total sales, roughly the same as last year. The biggest offshore growth region was Asia (excluding China), which grew 23%. ZTE said it is positioning itself as a “path-builder for the digital economy” and aimed to further expand its legacy connectivity business while growing its computing business. Its AI portfolio includes full-stack intelligent solutions, backed by key technologies such as high-speed networking, network computing and data processing.
ZTE is developing their own custom silicon. In the first half of 2024, the company continued to increase investment in advanced semiconductor process technologies, advanced architecture and seal packaging design, core intellectual properties and digitalized efficient development platform on the back of close to 30 years’ R&D build-up. We are an industry leader in terms of the ability to design the whole process of chip. On top of a solid foundation in the R&D of base-level technology for DICT chip, the Group has also constructed an ultra-efficient, green and intelligent full-stack computing network base pivoting on “data, computing and network” in line with developments in computing-network integration. The creation of a product regime meeting the core requirements of the diversified scenarios of “cloud, edge, terminal” has supported our ongoing leading position in terms of competitiveness.
ZTE has used its expertise in communication software and hardware development, engineering capabilities and industrialization to intensify its investment in computing power products and solutions. The company has launched a comprehensive suite of full-stack, full-scenario intelligent computing solutions, covering computing, networks, capabilities, intelligence and applications. These solutions include a full range of general computing servers, high-performance AI training servers, inference servers, liquid-cooled servers, distributed storage systems, high-end multi-control magnetic arrays, integrated training-inference machines and high-speed lossless switches.
In the terminal sector, ZTE has introduced the concept of “AI for All”, focusing on five core consumer scenarios: sports and health, audio and video entertainment, business and travel, home and education, and smart driving. The company has launched a full range of AI-driven terminal products, including smartphones, tablets, laptops and mobile internet devices, as part of its Full-Scenario Intelligent Ecosystem 3.0. This ecosystem promotes the integration of AI technology across mobile terminal devices, smart home devices, cloud computing and automotive electronics.
Moving forward, ZTE is dedicated to advancing its core technological innovations and accelerating its expansion into the “connectivity + computing + capability + intelligence” domain. The company will focus on strengthening its digital and intelligent infrastructure. By fostering open collaboration and pursuing diverse, mutually beneficial partnerships, ZTE aims to build a highly efficient and intelligent digital future with industry partners. The company said it expects: gradual adoption of 5G-Advanced, further rollout of 400G optical and construction of intelligent computing centers to drive the China’s telecom carrier market in the second half. Offshore, it will continue to focus on large national markets and big telcos for its wirelines and wireless product lines.
References:
https://www.lightreading.com/finance/zte-s-carrier-sales-slump-9-in-h1
https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0816/2024081601602.pdf
ZTE reports H1 2024 revenue of RMB 62.49 billion and net profit of RMB 5.73 billion
ZTE reports higher earnings & revenue in 1Q-2024; wins 2023 climate leadership award
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ZTE sees demand for fixed broadband and smart home solutions while 5G lags
China Unicom-Beijing and Huawei build “5.5G network” using 3 component carrier aggregation (3CC)
Huawei says it has deployed an “ultra large-scale 5.5G network” (there is no definition, 3GPP approved specs, or ITU-R recommendations/standards for 5.5G) operated by China Unicom in Beijing. The network uses three component carrier (3CC) aggregation to provide 70 percent coverage within Beijing’s 4th urban ring road. Huawei says China Unicom will offer comprehensive 5.5G service (again undefined) across stadiums, metro stations and tunnels, residential areas, scenic spots, business districts, and universities in key areas within the city’s 4th Ring Road and Beijing Municipal Administrative Center.
Editor’s Note: At the 5G Advanced Forum during MWC Shanghai 2023, Huawei’s President of ICT Products & Solutions, Yang Chaobin said, “In 2024, Huawei will launch a complete set of commercial 5.5G network equipment to be prepared for the commercial deployment of 5.5G.” Many believe that 5.5G is another name for 3GPP defined 5G Advanced, which is expected to bring new wireless technology innovations that improve speed, coverage, mobility, power efficiency, and sustainability. 3GPP Release 18 in 2024 is the beginning of 5G Advanced. The second and major release of 5G Advanced, Release 19, will be completed by the end of 2025. This release will focus on enhanced performance and the 5G system’s ability to meet commercial deployment needs.
In the Beijing Action Plan for Promoting 5G-A Technology Evolution and Application Innovation (2024-2026), Beijing Municipal Communications Administration hammered home the importance of Beijing’s role in pioneering 5.5G development. China Unicom Beijing is striving to do its part, with a large-scale 5.5G network demonstration at the beginning of 2024 followed by the ultra-large-scale commercial 5.5G network deployment of recent months, in helping Beijing become a “dual 10 Gbps” city that sets the bar for network construction, device development, and industry enablement. With the first version of 5.5G standards frozen in June 2024 and more than 20 commercial 5.5G devices now on the market, a mature 5.5G industry ecosystem is taking shape.
“Full 5.5G coverage” in Beijing’s core urban areas and the Beijing Municipal Administrative Center. Photo: Huawei
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In August 2022, China Unicom Beijing and Huawei commercialized the world’s largest 3.5 GHz 2CC network, which has brought 200 MHz 2CC coverage to more than 85% of Beijing’s urban area while providing comprehensive coverage for Beijing’s core areas and the Beijing Municipal Administrative Center. In 2023, this was further augmented when China Unicom Beijing and Huawei completed a 2.1 GHz band deployment targeting key urban scenarios. These deployments substantially improved the network experience of users in Beijing while laying a solid foundation for the future evolution to 5.5G, and this year’s 5.5G 3CC deployment paves the way for larger-scale 5.5G deployments in the coming years.
The ultra-large commercial 5.5G 3CC network consists of more than 4,000 base stations and covers well-known landmarks in Beijing, such as Wukesong, Capital Indoor Stadium, Workers’ Stadium, Beijing Railway Station, Guijie Street, Panjiayuan, and Beijing University of Technology. Featuring 5.5G capabilities, the network provides powerful support for services such as immersive video, UHD live streaming, and cloud gaming. In addition to consumer scenarios, China Unicom Beijing is proactively pursuing innovations in UHD shallow compression encoding, IoT, and XR split rendering, unlocking the full potential of 5.5G networks to enable various industries.
Yang Lifan, Deputy General Manager of China Unicom Beijing, remarked: “We have the world’s largest 200 MHz 5G network and it makes our 3CC carrier aggregation much easier. 5.5G 3CC coverage will be extended to match that of our current 200 MHz 5G network. With Huawei’s advanced technologies and our smart operations, we will provide users with a much better network experience.”
David Li, President of Huawei Wireless Network 5G<E TDD Product Line, said: “We are honored to mark a groundbreaking milestone in 5.5G network construction with China Unicom Beijing — large-scale commercial 5.5G. We will continue to innovate and provide more efficient, smarter, and greener network solutions, enabling users to enjoy a superior, smooth experience with 5.5G networks.”
References:
https://www.huawei.com/en/news/2024/7/5ga-beijing-3cc#
Huawei pushes 5.5G (aka 5G Advanced) but there are no completed 3GPP specs or ITU-R standards!
https://blog.huawei.com/en/post/2023/11/14/5-5g-whats-in-a-number
5G Advanced offers opportunities for new revenue streams; 3GPP specs for 5G FWA?
Nokia, BT Group & Qualcomm achieve enhanced 5G SA downlink speeds using 5G Carrier Aggregation with 5 Component Carriers
T-Mobile US, Ericsson, and Qualcomm test 5G carrier aggregation with 6 component carriers
Finland’s Elisa, Ericsson and Qualcomm test uplink carrier aggregation on 5G SA network
Chinese engineers field test a “6G” network with semantic communications on 4G infrastructure
According to the Xinhua news agency, Chinese telecom engineers have established the world’s first field test network for 6G communication and intelligent integration. That’s before 6G is even defined let alone specified by ITU-R WP5D or 3GPP Release 21. The experimental network has demonstrated that semantic communication [1.] can reach the transmission capabilities of 6G on existing 4G infrastructure.
Note 1. Semantic communication aims at the successful transmission of information conveyed by the source rather than the accurate reception of each single symbol or bit regardless of its meaning.
The network has achieved a remarkable tenfold improvement in key communication metrics, including capacity, coverage and efficiency, according to a team from Beijing University of Posts and Telecommunications who unveiled their work at a seminar on July 10th. The network serves as a platform which facilitates the efforts of research institutions in conducting theoretical research and initial verification of 6G pivotal technologies. It can effectively lower the entry threshold for 6G research, making it more accessible for innovation, according to the team.
“The integration of the two will accelerate the formation of new business forms of the digital economy,” Professor Zhang Ping, who heads the university’s research team, reportedly said at the conference where the 6G field test network was unveiled. “AI will improve the perception and semantic understanding of communication, while the ubiquitous communication of 6G will in turn extend the reach of artificial intelligence to all corners of all fields,” Zhang was quoted as saying.
Existing 4G and 5G infrastructure has potential to ramp up to 6G, according to the results of a test network. Photo: Shutterstock
China is working to commercialize 6G, the next-generation wireless technology after 5G, by around 2030, the same time at which 6G standards are expected to be completed. The ITU-R says 6G could promote the growth of a range of advances, allowing communication to be immersive and connectivity universal. But with existing communication technology reaching its theoretical bandwidth limit, there are a series of big problems that have to be overcome. These include the difficulty of increasing capacity, the high cost of coverage, and high energy consumption.
The 6G technology market is also expected to enable major improvements in imaging, presence technology and location awareness. In conjunction with AI, the 6G computing infrastructure should be able to determine the best location for computing, including decisions about data storage, processing and sharing.
References:
https://english.news.cn/20240711/5dd430b4f66141d6a75a7fc505597fb3/c.html
https://www.lightreading.com/6g/china-builds-world-s-first-6g-field-test-network
ITU-R: IMT-2030 (6G) Backgrounder and Envisioned Capabilities
ITU-R WP5D invites IMT-2030 RIT/SRIT contributions
NGMN issues ITU-R framework for IMT-2030 vs ITU-R WP5D Timeline for RIT/SRIT Standardization
IMT-2030 Technical Performance Requirements (TPR) from ITU-R WP5D
Highlights of 3GPP Stage 1 Workshop on IMT 2030 (6G) Use Cases
6th Digital China Summit: China to expand its 5G network; 6G R&D via the IMT-2030 (6G) Promotion Group
5G Advanced offers opportunities for new revenue streams; 3GPP specs for 5G FWA?
What is 5G Advanced and is it ready for deployment any time soon?
China Telecom and China Mobile invest in LEO satellite companies
Two of China’s state-owned telcos have taken stakes in new LEO satellite companies.
- China Telecom has set up a new fully owned subsidiary, Tiantong Satellite Technology Co., registered in Shenzhen with 1 billion Chinese yuan (US$138 million) paid-in capital. China Telecom, which is currently the only operator with a mobile satellite license, operates three Tiantong Geo orbit satellites, launched between 2016 and 2021, covering China, the western Pacific and its neighbors.
- In April China Mobile took a 20% stake in a new RMB4 billion ($551 million) state-owned company, China Shikong Xinxi Co., registered in Xiongan. China Satellite Network Group, the company behind Starnet, China’s biggest LEOsat project, will own 55%, and aerospace contractor Norinco, a 25% shareholder.
China Telecom will shutter its legacy satellite subsidiary, established in 2009, and transfer the assets into the new company.
The other new business, China Shikong, lists its scope as satellite communication, satellite navigation and remote sensing services.
The two investments come as China Starnet is readying to launch its first satellites in the second half of the year. It is aiming to build a constellation of 13,000, with the first 1,300 going into operation over the next five years, local media has reported.
In addition to Starnet, two other mass constellations are planned – the state-owned G60 and a private operator, Shanghai Hongqing. Neither has set a timetable. They will be playing catch up with western operators like Starlink and OneWeb, which are already operating thousands of commercial satellites.
Since foreign operators are forbidden from selling into China, it is not yet clear how China is going to structure its LEO satellite industry and what role precisely the new operators are going to play.
References:
Chinese telcos tip cash into satellite (lightreading.com)
China Mobile launches LEO satellites to test 5G and 6G – Developing Telecoms
Very low-earth orbit satellite market set to reach new heights | TelecomTV
5G connectivity from space: Exolaunch contract with Sateliot for launch and deployment of LEO satellites
LEO operator Sateliot joins GSMA; global roaming agreements to extend NB-IoT coverage
Momentum builds for wireless telco- satellite operator engagements
Satellite 2024 conference: Are Satellite and Cellular Worlds Converging or Colliding?
ZTE reports higher earnings & revenue in 1Q-2024; wins 2023 climate leadership award
China’s ZTE reported 3.7% higher Q1-2024 earnings of 2.7 billion Chinese yuan (US$380 million), with sales up 5% to RMB30.6 billion ($4.2 billion).
With decreased CAPEX from China’s network operators, ZTE accelerated its transition from full connectivity to “connectivity + computing power” ino order to expand its addressable market.
Internationally, ZTE said it “continued to achieve continuous breakthroughs with major telecom operators in key countries, sustaining its growth trend. Simultaneously, in terms of government-enterprise business and consumer business, the company intensified its expansion in these two sectors, with both segments returning to rapid growth paths.”
That’s in sharp contrast to its European network equipment rivals, who have been exposed by the worldwide 5G wind-down. Nokia lost a fifth of its revenue in Q1; Ericsson reported a 14% slide, with network sales off by 19%.
ZTE didn’t break out its segment figures for Q1, but its 2023 full-year filing showed it remains heavily reliant on its home market, which contributed just under 70% of total revenue. Both ZTE and Huawei derive at least 80% of network spending by China’s state-owned telco giants (China Mobile, China Telecom, China Unicom).
ZTE, leveraging its long-term accumulation of ICT full-stack full-domain capabilities, is pursuing strategic opportunities in digitization, intelligence, and decarbonization. Keeping pace with the wave of AI development, the company deepens its business layout of “connectivity + computing power,” providing global customers in high-speed networks, computing infrastructure, and industrial digital transformation with an open and innovative intelligent network foundation.
ZTE says it’s committed to deeply integrating AI technology with terminals to drive product innovation and intelligent upgrades, thus constructing a smart ecosystem. For terminals, ZTE has proposed the concept of “AI for All,” launched an AI-driven all-scenario intelligent ecosystem 3.0, and released a variety of innovative products and technologies.
In the first quarter of 2024, the company’s research and development expenses were RMB 6.38 billion, accounting for 20.9% of operating revenue. That provided sustained strong impetus for business innovation and product enhancement/competitiveness.
Moving forward, ZTE says it is committed to actively embracing the digital construction wave, accelerating its transition towards “connectivity + computing power,” thereby driving the company’s high-quality development. The company will continue collaborating with industry partners to establish highly efficient, green, and intelligent digital infrastructure, aiming to advance the development of the global ICT industry.
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Separately, ZTE was honored with 2023 Climate Leadership Award (A list) at “Embracing International Disclosure Standards and Amplify the Voice of Chinese Companies – CDP China 2023 Annual Report Release and Award Ceremony.” This recognition comes as ZTE’s case study, “Target-Driven, Layered Decoding: Pathways and Actions to Achieve Climate Goals” was featured in 2023 CDP China Corporates Disclosure Report. The event further acknowledged ZTE’s outstanding contributions to climate change mitigation and sustainable development.
Summer Chen, Vice President and General Manager of Branding & PR Strategies at ZTE, shared the company’s actions and leadership in promoting green innovations during her speech titled “Shaping Digital Innovation for a Shared Sustainable Future.” She stated, “Green and sustainable development is a global consensus, with digital intelligence playing a pivotal role. In line with this trend, ZTE has dedicated itself to green and low-carbon innovations, and received an A rating for its leading climate action in CDP Climate Change 2023 Questionnaire, an honor achieved by only 2% of global participants.”
Ms. Chen emphasized ZTE’s commitment to green development, leveraging technological innovation to shape an eco-friendly ecosystem. This commitment is underpinned by four dimensions: green operations, green supply chain, green digital infrastructure and green empowerment, contributing to achieve carbon peak and carbon neutrality goals. ZTE focuses on energy conservation and carbon reduction within its business operations, while empowering industries to foster new quality productive forces, aiming to set a global benchmark as a green, sustainable, and low-carbon tech company.
References:
https://www.zte.com.cn/content/dam/zte-site/investorrelations/en_quarter_report/20240425.pdf
https://www.zte.com.cn/global/about/news/zte-scoops-2023-climate-leadership-award-a-list.html
https://www.lightreading.com/finance/zte-defies-capex-slump-with-higher-q1-earnings-revenue
https://www.zte.com.cn/content/dam/zte-site/investorrelations/en_annual_report/20240326.pdf
China Mobile & ZTE use digital twin technology with 5G-Advanced on high-speed railway in China
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TM and ZTE Malaysia to develop next-gen hybrid cloud 5G core network
China Mobile reports record operating revenues in 1st Quarter 2024
China Mobile, the world’s largest operator in terms of subscribers, recorded operating revenues of CNY263.7 billion ($36.4 billion) in the first quarter of the year, an increase of 5.2% year-on-year, the carrier said in its earnings statement. The company’s net profit increased 5.5% year-on-year to CNY29.6 billion. Also, the telco reported that revenue from telecommunications services was CNY219.3 billion, up by 4.5% year-on-year. The telco ended the first quarter of the year with a total of 488 million 5G subscribers. China Mobile had reported a net addition of 138 million 5G subscribers during 2023. In the mobile segment, the telco reached a total of 996 million subscribers at the end of March 2024, after an addition of 5 million customers during the first quarter.
Highlights:
- Adopt a strategy-led approach, driving new milestones in business performance
- Leverage innovation, deepening strategic transformation with remarkable results
- Expedite further business upgrade, facilitating mutual advancement of the “two new elements”
- Achieve breakthroughs amidst adversity, yielding fruitful results from innovation and reform Dedicated to enhancing shareholder returns, using a multi-pronged approach Forge ahead with determination, accelerating the building of a world-class enterprise
Mr. Yang Jie, Chairman of the Company commented, “In 2023, despite various challenges faced by the Company in a complex and severe macro- environment, we seized the opportunities emerging from accelerated economic and social digital transformation. This helped anchor us in our position as a world class information services and sci-tech innovation enterprise. Our efforts were focused on fully implementing our “1-2-2-5” strategy and strengthening innovation and core competitiveness to promote high-quality and sustainable development. Our business results reached new milestones, with revenue surpassing the RMB trillion mark for the first time in our history of development, and net profit attaining a record high. In terms of operations, our strategic transformation, reforms and innovation all advanced to a new level, underscoring our solid progress in establishing a world-class enterprise that takes pride in outstanding products, reputable brands, leading innovation and modern governance.”
“The Group will continue to pursue stable progress while forging ahead with a steadfast focus on integrity and innovation. We will enhance core functions, improve core competitiveness, expedite the cultivation and growth of emerging sectors of strategic importance, develop new quality productive forces at an accelerated pace, and establish ourselves as a world-class information services and sci-tech innovation enterprise to a high standard. With these efforts, we will consistently create greater value for our shareholders and customers,” the China state owned telco said.
China Mobile plans to launch 5G-Advanced (5G-A) technology in over 300 cities across China this year, according to local press reports. The telco, which claims a leading role in the development of 5G-A 3GPP specifications, also plans to promote the release of over 20 5G-A compatible phones within the year. To showcase its new 5G-A network, China Mobile has established 5G-A demonstration halls in various locations across China.
China Mobile’s vice president, Gao Tongqing, stated that this launch will further accelerate the development of new information infrastructure and unlock the full potential of 5G technology. The carrier also said it aims to achieve widespread adoption of 5G-A technology in China through partnerships with manufacturers and chip suppliers.
Beijing, Shanghai and Guangzhou are among the first cities where China Mobile will activate the new technology.
China had a total of 11.6 million mobile communication base stations as of the end of last year, of which 3.4 million were 5G base stations. 5G base stations currently account for nearly 29% of total mobile base stations in China. The ratio is 7.8 percentage points higher compared to the end of 2022.
Future Outlook:
The impact of the new wave of technological revolution and industrial reforms will continue to grow, so will the importance of integrated innovation. The three aspects of this integrated innovation will be highlighted in the power of information, the new generation information technology, and the merger of information service and social operation systems. At the same time this integrated innovation will deepen in three directions – the applications of a new generation of information technology to rapidly form new growth momentum, the collaboration of industry, academia, research and application to foster a new innovation paradigm, and the integration of digital and real economy to open up new development opportunities.
China Mobile sees valuable opportunities as they expand our information services. With the advocacy of the national “AI+” initiative and the further accelerated advancement of Digital China, the industry experiences new growth potential from the development of new quality productive forces. This progress brings forth the emergence of data as a new factor of production, computility as a new fundamental energy source and AI as a new instrument of production. The information services industry has not only in itself become an important sector for the development of new quality productive forces, but also a strong support for other sectors in this pursuit. General AI, particularly represented by AI large models, is developing robustly.
The role of AI is also fast changing from an assisting tool that helps different industries improve quality and efficiency, to an indispensable infrastructure and core capability that supports economic and social transformation and development. While AI brings forth disruptive applications, “AI+” opens up vast blue-ocean of opportunities. Fixating the vision of building a world-class information services and sci-tech innovation enterprise, we will capture opportunities arising from the development of “AI+” and extending our “5G+” initiatives towards 6 this direction. We will identify a new roadmap of transformation and upgrade through comprehensive, systematic and deep-dived integrated innovation. In doing so, we will drive more creation to enrich life, enhance quality production and support precise governance powered by digital intelligence. We will satisfy, drive and create demand to form a new for value growth trajectory and fuel the future development of the Company.
References:
p240321.pdf (chinamobileltd.com)
https://www.rcrwireless.com/20240423/carriers/china-mobile-q1-revenues-up-5-year-on-year
China Mobile & ZTE use digital twin technology with 5G-Advanced on high-speed railway in China
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WSJ: China’s Telecom Carriers to Phase Out Foreign Chips; Intel & AMD will lose out
China’s largest telecom firms were ordered earlier this year to phase out foreign computer chips from their networks by 2027. That news confirms and expands on reports from recent months. It was reported in the Saturday print edition of the Wall Street Journal (WSJ). The move will hit U.S. semiconductor processor companies Intel and Advanced Micro Devices. Asia Financial reported in late March that these retaliatory bans would cost the U.S. chip firms billions.
The deadline given by China’s Ministry of Industry and Information Technology (MIIT) aims to accelerate efforts by Beijing to halt the use of such core chips in its telecom infrastructure. The regulator ordered state-owned mobile operators to inspect their networks for the prevalence of non-Chinese semiconductors and draft timelines to replace them, the people said.
In the past, efforts to get the industry to wean itself off foreign semiconductors have been hindered by the lack of good domestically made chips. Chinese telecom carriers’ procurements show they are switching more to domestic alternatives, a move made possible in part because local chips’ quality has improved and their performance has become more stable, the people said.
Such an effort will hit Intel and AMD the hardest, they said. The two chip makers have in recent years provided the bulk of the core processors used in networking equipment in China and the world.
China’s MIIT, which oversees the regulation of the wireless, broadcasting and communication industries, didn’t respond to WSJ’s request for comment. China Mobile and China Telecom , the nation’s two biggest telecom carriers by revenue, also didn’t respond.
In March 2023, the Financial Times reported China is seeking to forbid the use of Intel and AMD chips, as well as Microsoft’s operating system, from government computers and servers in favor of local hardware and software. The latest purchasing rules represent China’s most significant step yet to build up domestic substitutes for foreign technology and echo moves in the US as tensions increase between the two countries. Among the 18 approved processors were chips from Huawei and state-backed group Phytium. Both are on Washington’s export blacklist. Chinese processor makers are using a mixture of chip architectures including Intel’s x86, Arm and homegrown ones, while operating systems are derived from open-source Linux software.
Beijing’s desire to wean China off American chips where there are homemade alternatives is the latest installment of a U.S.-China technology war that is splintering the global landscape for network equipment, semiconductors and the internet. American lawmakers have banned Chinese telecom equipment over national-security concerns and have restricted U.S. chip companies including AMD and Nvidia from selling their high-end artificial-intelligence chips to China.
China has also published procurement guidelines discouraging government agencies and state-owned companies from purchasing laptops and desktop computers containing Intel and AMD chips. Requirements released in March give the Chinese entities eight options for central processing units, or CPUs, they can choose from. AMD and Intel were listed as the last two options, behind six homegrown CPUs.
Computers with the Chinese chips installed are preapproved for state buyers. Those powered by Intel and AMD chips require a security evaluation with a government agency, which hasn’t certified any foreign CPUs to date. Making chips for PCs is a significant source of sales for the two companies.
China Mobile and China Telecom are also key customers of both chip makers in China, buying thousands of servers for their data centers in the country’s mushrooming cloud-computing market. These servers are also critical to telecommunications equipment working with base stations and storing mobile subscribers’ data, often viewed as the “brains” of the network. Intel and AMD have the lion’s share of the overall global market for CPUs used in servers, according to data from industry researcher TrendForce. In 2024, Intel will likely hold 71% of the market, while AMD will have 23%, TrendForce estimates. The researcher doesn’t break out China data.
China’s localization policies could diminish Intel and AMD’s sales in the country, one of the most important markets for semiconductor firms. China is Intel’s largest market, accounting for 27% of the company’s revenue last year, Intel said in its latest annual report in January. The U.S. is its second-largest market. Its customers also include global electronics makers that manufacture in China.
In the report, Intel highlighted the geopolitical risk it faced from elevated U.S.-China tensions and China’s localization push. “We could face increased competition as a result of China’s programs to promote a domestic semiconductor industry and supply chains,” the report said.
References:
https://www.wsj.com/tech/china-telecom-intel-amd-chips-99ae99a9 (paywall)
https://www.ft.com/content/7bf0f79b-dea7-49fa-8253-f678d5acd64a
China Mobile & China Unicom increase revenues and profits in 2023, but will slash CAPEX in 2024
GSMA: China’s 5G market set to top 1 billion this year
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China’s telecom industry business revenue at $218B or +6.9% YoY
Huawei is back – net profits more than doubled in 2023!
China’s Huawei Technologies said its net profit more than doubled last year, marking a stunning comeback for the company years after U.S. export controls cut it off from advanced technology.
The tech giant on Friday said profit rose to 87 billion yuan, or $12 billion, a rise of more than 140% from the same period a year ago. It is the largest jump in profit for the company since it started reporting comparable figures in 2006. Revenue rose 10% to $99 billion.
It’s Huawei’s highest revenue number, and its first year of topline growth, in four years. Operating cash flow of RMB69.8 billion ($9.7 billion), up fourfold from 2022 and also the highest in four years.
In a statement, Huawei downplayed the figures, with current rotating chairman Ken Hu describing them as “in line with forecast.”
It’s a long way from the imposition of U.S. technology transfer sanctions five years ago, when Huawei executives acknowledged the company was fighting for its survival.
Huawei said growth was driven by higher sales in its consumer electronics and cloud computing offerings.
Last September, Huawei surprised U.S. authorities by releasing a new smartphone, the Mate 60 Pro, with 5G-like capabilities, running on its homegrown chips. Five years after the U.S. restricted sales of the most powerful chips and the Android operating system to Huawei, the telecom equipment and mobile phone maker has shown strong resilience.
Huawei’s core ICT infrastructure unit, comprising the legacy carrier network business and enterprise network sales, remains the biggest source of revenue. It grew 2.3% to RMB362 billion ($50.1 billion), while the cloud business was another of the big growth drivers, gaining 22%.
The company has diversified into new business lines such as cloud computing, enterprise software and automobile systems and retooled its products.
Huawei co-built Aito, one of China’s most popular EVs. There’s also the newly formed smart auto components units business, which more than doubled revenue to RMB4.7 billion ($650 million).
“We’ve been through a lot over the past few years. But through one challenge after another, we’ve managed to grow,” said Ken Hu, Huawei’s rotating chairman.
Last year nearly 70% of Huawei’s revenue came from China as its overseas presence shrunk. Five years ago, China formed about 60% of its revenue, while the rest came from Europe and emerging markets. Huawei doesn’t break out U.S. sales figures.
Revenue from its telecommunication equipment and enterprise technology business grew 2%. Sales at its consumer business group, encompassing products such as smartphones, laptops and smart wearables, rose 17%.
Huawei was the world’s largest providers of telecom equipment and among the biggest smartphone makers globally, but U.S. sanctions beginning in 2019 crushed its smartphone business and forced it to spin off its budget Honor handset brand.
U.S. authorities also blocked American carriers from buying from the Chinese company and asked allies not to use Huawei’s telecom equipment, calling the company a national security threat. Huawei said then that restricting it from doing business in the U.S. wouldn’t improve national security and would limit the country’s 5G development.
But the past few months have indicated a reversal of Huawei’s fortunes. Since the launch of the Mate 60 series, Huawei has begun to chip away at Apple’s high-end smartphone market share in China.
On Friday, Huawei said the Mate 60 Series and HarmonyOS, its own operating system for mobile phones and other smart devices, had “received wide acclaim.” The company said its consumer unit grew by “overcoming major technical barriers and diving deep into the industry’s most challenging issues.”
Huawei didn’t provide sales numbers for the phones. Ming-Chi Kuo, a supply chain analyst at TF International Securities, last September predicted that Huawei would likely deliver at least 12 million Mate 60 handsets by August.
The company said cloud computing revenue rose 22% last year. Huawei, China’s second-largest cloud computing provider, had outpaced the growth of market leader Alibaba Group and smaller rival Tencent Holdings. Last year, the company launched new cloud-based artificial-intelligence offerings for business use that are now deployed in banks and mines.
Analysts say Huawei is also set to benefit from China’s localization policy, as the company expands its offerings in areas such as semiconductors, where Beijing is seeking more self-sufficiency.
Huawei has managed to deliver AI chips that developers say match the capabilities of some of Nvidia’s top processors. Nvidia named Huawei as one of its competitors in its annual report in February.
In 2023, Huawei spent $23 billion on research and development, about 23% of its total revenue.
References:
https://www.lightreading.com/5g/huawei-profit-soars-as-it-returns-to-growth
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Nokia to exit TD Tech joint venture with Huawei due to U.S.-China tensions
According to a January 21,2024 article in the South China Morning Post, Nokia is set to exit its joint venture with Huawei in the telecommunications sector due to US-China tensions. Nokia has found new buyers for its majority stake in a Beijing-based joint venture with Huawei Technologies, after a proposed deal fell through last year following strong protest by the Chinese partner. The article states that Nokia will sell its majority stake in TD Tech [1.] to a group that will be jointly controlled by Huawei and a group of entities that include the government-owned Chengdu High-Tech Investment Group and Chengdu Gaoxin Jicui Technology Co, as well as venture capital firm Huagai, according to a disclosure published on Friday by the State Administration for Market Regulation (SAMR).
Huawei had a 14% share in the Chinese smartphone market in the third quarter 2023, putting it in fifth place behind its spin-off Honor and rivals Oppo, Vivo and Apple, data from market intelligence firm Counterpoint Research showed. According to Statista, Huawei had a 58% share of all 5G base stations in China as of the 3rd quarter 2023. Its closest competitor was ZTE with a market share of 31%. Nokia had only a 2% market share.