China telcos add 43.71 5G subscribers in July, while capital spending declines

5G Subscriber Adds:

China’s network operators recorded a net addition of 43.71 million 5G subscribers in July, according to the carriers’ latest available reports.

  • China Mobile, the world’s largest operator in terms of subscribers, added 28.91 million 5G subscribers in July.  It had 279.60 million 5G subscribers at the end of July, compared to 84.05 million 5G customers in July 2020.  The telco’s overall mobile subscriber base at the end of July reached 947.46 million, up compared to 945.50 million in June 2020.
  • China Unicom said it added a total of 7.74 million 5G subscribers during July. During the first seven months of the year, Unicom added a total of 50.24 million 5G subscribers.  The telco ended July with 121.07 million 5G subscribers. China Unicom reported an overall mobile base of with 311.61 million subscribers at the end of last month, up from 310.45 million in June.
  • China Telecom added 7.06 million 5G subscribers in July to take its total 5G subscribers base to 138.21 million.  The telco added 51.71 million 5G customers in the January-July period. China Telecom’s overall mobile base amounted to 364.62 million subscribers at the end of the July, after adding 2.13 million customers during the month.

China Telco CAPEX Crash:

However, total capital spending by the three state owned China telecom operators declined by 35% in the first half, with the number of new 5G base stations down 34% compared with last year. Spending on 5G by the two biggest telcos, China Mobile and China Telecom, slid 19%. China Unicom, has not disclosed its 5G spending but said it had reached only a fifth of its full-year capex target.

China Unicom revealed it had spent only RMB14 billion ($2.2 billion) of its 2021 capex budget of RMB70 billion ($10.8 billion), down 45% from 2020. It has a year-end target for 5G of RMB35 billion ($5.4 billion), the same as 2020.

China Mobile’s 5G investment of RMB50.2 billion ($7.8 billion) was 9% lower than last year, and only 46% of its full-year target of RMB110 billion ($17 billion).

China Tower reported a 28% fall in capex to 10.4 billion yuan ($1.6 billion).

China Telecom’s 5G spend plunged 45% to RMB11.1 billion ($1.71 billion), just over a quarter of its full-year forecast of RMB39.7 billion ($6.1 billion). Total capex declined 37% for the half. From the Chinese website Yicai.com:

From the data point of view, China Telecom’s capital expenditure in the first half of this year was less than one-third of the annual capital expenditure, and the investment progress was lagging behind. Liu Guiqing said that 5G was the largest investment in the first half of the year, including investment in 3.5GHz and 2.1GHz equipment. “On the whole, the investment in 3.5GHz equipment is relatively normal; for 2.1GHz investment, we make corresponding adaptations according to the current situation of the entire industry chain and the terminal ecology. At present, the purchase of 2.1GHz equipment has been completed, 3.5GHz telecom equipment is being negotiated, and there will be results soon.” He said that 87 billion yuan of investment can be completed this year, of which 5G investment is 39.7 billion yuan.

The China telcos maintain the same capex guidance for the full year of around 185 billion yuan ($28.6 billion), slightly up from last year’s 182 billion yuan ($28.1 billion). Yet for China Telecom and China Unicom, those capex numbers look quite challenging.

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5G Base Station Builds:

China’s three major mobile carriers have already activated 961,000 5G base stations and connected 365 million 5G-compatible devices by end-June, Chinese press reported, citing comments by press secretary for the Ministry of Industry and Information Technology (MIIT) Tian Yulong.

Unicom said it had built just 80,000 new base stations in the first half and was aiming to deploy another 240,000 in the latter half of this year.

Meanwhile, China Broadcast Network and China Mobile have recently completed a tender to deploy 400,000 5G base stations this year, as part of the companies’ efforts to launch a shared 5G network. The contracts had been won by Huawei, ZTE, Datang, Nokia and Ericsson.

China Mobile has attributed its lower 5G investment to issues around its partnership with China Broadcast Network in building a new 5G network in the 700MHz band. The main tender was set in July. China’s 5G rollout is a high priority infrastructure project closely supervised by the national government. The two carriers expect this shared 5G network to reach nationwide coverage within the next two years.

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5G Subscriber Forecast & 5G SA Core Network:

China is forecast to reach 739 million 5G subscribers by 2025, according to a recent study by ABI Research. That would represent nearly 40% of the total global 5G subscriber market.

Earlier this year, Liu Liehong, vice minister of industry and information technology, had said that 5G Standalone (5G SA) networks covered all prefecture-level cities across China.

We wonder if all China’s telcos have implemented the same specification for 5G SA/core network and whether it is “cloud native” or not?  Also, whether they use NFV (virtual machines) or containers?

Note there is no standard or implementation specification(s) that would ensure vendor interoperability on 5G SA networks from different telcos.

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References:

https://www.rcrwireless.com/20210824/5g/chinese-carriers-add-43-million-5g-subscribers-july

https://www.lightreading.com/5g/chip-shortage-taking-its-toll-on-china-5g-rollout/d/d-id/771681?

https://www.yicai.com/news/101136803.html

https://asia.nikkei.com/Spotlight/5G-networks/Chinese-telecom-operators-cut-back-5G-network-construction

China Telcos Lose Subscribers; 5G “Co-build and Co-share” agreement to accelerate