China Mobile
China Mobile says COVID-19 effected Q1 2020 Results: Loss of 4M 4G subs, 31.7M 5G subs
China Mobile’s first quarter 2020 earnings report was somewhat disappointing, save for 5G. Revenues, earnings and profits all decreased for the first quarter as the world’s largest mobile operator felt the impact of the coronavirus outbreak in China.
The state owned telco lost 4 million customers which is < 1/2% of their customer base in the first quarter. There were 946 million total China Mobile subscribers at the end of March 2020.
Revenues fell 2%, to 181.3 billion Chinese yuan (US$25.6 billion), compared with the year-earlier period, while revenue from telecommunications services was RMB168.9 billion, up by 1.8% over the same period last year. Profit attributable to equity shareholders was RMB23.5 billion ($3.3 billion), down by 0.8% over the same period last year.
The company (referred to as “the Group”) addressed the impact of COVID-19 in their Q1 2020 earnings report:
COVID-19 posed an impact on the overall society and economy in the first quarter of 2020. The Group’s business development was no exception. In light of COVID-19, the Group has introduced “three safeguards” which endeavoured to provide reliable communications, maintain service continuity and step up comprehensive prevention and control measures. Leveraging the demand for informatization services brought about by measures to prevent and control COVID-19 and the resumption of work and production, the Group has also accelerated business transformation and upgrade.
The Group’s total number of mobile customers was around 946 million as at 31 March 2020. Among them, the numbers of 4G customers and 5G package customers were 752 million and 31.72 million, respectively. During the first quarter of the year, data traffic business maintained growth momentum with handset data traffic recording a year-on-year increase of 43.4% and handset data DOU (average handset data traffic per user per month) reaching 8.3GB. Total voice usage declined by 16.3% year on-year to 661.4 billion minutes, which was attributable to OTT substitution and COVID-19.
Buoyed by the rapid growth of corporate SMS, total SMS usage rose by 45.4% year-on-year. Mobile ARPU dropped by 6.7% year-on-year to RMB46.9 for the first quarter of the year and the decline rate has moderated compared to that of the previous year. As at 31 March 2020, the total number of wireline broadband customers was 191 million, with a net increase of 4.10 million for the first quarter of the year. Wireline broadband ARPU amounted to RMB31.3.
Amidst COVID-19, the Group’s telecommunications services revenue grew by 1.8% year on-year to RMB168.9 billion for the first quarter of 2020. Currently, measures to prevent and control COVID-19 are still underway and some impact may carry over.
The Group will continue to foster business transformation and upgrade and make an all-out effort to promote the coordinated development of the CHBN four major markets. It will also continue to optimize its revenue structure and strive to maintain growth in telecommunications services revenue for the full-year of 2020. The Group’s revenue from the sales of products and others went down by 34.9% year-on year to RMB12.4 billion for the first quarter of the year. The decline was mainly caused by contracted sales of handsets and IoT devices, amongst other products, due to COVID-19.
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The figures seem to vindicate arguments that China Mobile will prove fairly resilient to COVID-19 as a critical lifeline to the wider world for people under lockdown/ shelter in place orders. While customer numbers fell in mobile, there was no decline at China Mobile’s fixed-line business, which picked up another 4 million broadband customers to finish March with 191 million in total. On the mobile side, usage of traditional voice services fell from 278 minutes per user each month in the final quarter of 2019 to just 234 minutes in the first quarter of 2020. Mobile data usage, though, rose from 7.1 to 8.3 gigabytes per month over the same period.
Largely due to China government incentives, China Mobile now claims nearly 32 million 5G customers, up from just 2.6 million in December 2019. Sustain that rate of growth and the operator would be on course for almost 120 million 5G customers by the end of this year. That may be difficult once China Mobile has attracted all the early 5G adopters. It will be interesting to see how soon the major improvements brought by 3GPP Release 16 (scheduled to be frozen in early July 2020) will be implemented by the Group’s network equipment vendors- principally Huawei and ZTE.
Key Insights From Bloomberg:
- The carrier, which has more than 940 million subscribers, may benefit in the months ahead as economic activity begins to return toward normal. The expansion of 5G coverage planned this year may also help lure subscribers to higher priced heavy-data plans.
- While the company is spending to expand 5G networks, it has also been maintaining dividend levels and had cash and bank deposits of about 317 billion yuan as of the end of last year.
- Attracting 5G subscribers is a key for growth as those users tend to spend more per month. The company had about 31.7 million 5G subscribers as of the end of March.
- While total subscribers fell in the first quarter, the carrier benefited from a slight rise in average revenue per user from the previous quarter as the introduction of 5G networks made it easier for users to play richer video games and use applications that consume more data.
Iian Morris, International Editor at Lightreading wrote in a blog post:
A challenge for the Group is to meet the investments required for 5G infrastructure. China Mobile has earmarked RMB100 billion ($14.1 billion) for capital expenditure on 5G in 2020, an increase of 317% on what it spent in 2019, according to market-research firm Omdia (owned by market research goliath Informa). Its plan is to add at least 250,000 5G base stations by the end of this year.
Meeting this commitment will be difficult as earnings and cash flow are squeezed by COVID-19. Just-published figures show that earnings before interest, tax, depreciation and amortization fell nearly 6% in the first quarter, to RMB68.5 billion ($9.7 billion), compared with the year-earlier period. Under government pressure to hit deployment targets, China Mobile may look to reduce costs in other parts of the business to offset the increase in spending on 5G. “The group will continue to develop new sources of revenue and identify ways to curtail expenses, while taking measures to reduce costs and enhance efficiency,” it says in its statement.
Hacking into headcount will be difficult if China Mobile is to avoid disruption to 5G buildout and sales and marketing activities. Nevertheless, the operator may be able to realize some cost savings through pruning of a workforce that numbered as many as 456,239 employees at the end of last year. While major US operators have slashed tens of thousands of roles in recent years, China Mobile seems to have been a lot more cautious on the jobs side: Its staff numbers have fallen less than 1% since the end of 2016.
The latest update on 5G will be a further concern for US officials already worried about falling behind China in the development and rollout of the new network technology. With at least 30 million 5G customers, China already has enough users of the service to spur the development of new commercial applications that might not be feasible in the old 4G world. That is exactly what the US does not want to hear.
References:
China Telcos Lose Subscribers; 5G “Co-build and Co-share” agreement to accelerate
Decrease in China’s Mobile Subscribers:
China’s wireless carriers are reporting substantial drops in subscribers as the coronavirus crisis reduces business activity.
China Mobile Ltd., the world’s largest wireless carrier, reported its first net decline since starting to report monthly data in 2000. China Mobile subscriptions fell by more than 8 million over January and February, data on the company’s website show.
China Telecom Corp. said it lost 5.6 million users in February, while China Unicom Hong Kong Ltd. subscribers fell by 1.2 million in January.
The across the board China subscriber slump indicates that the coronavirus pandemic crisis, which first emerged in China late last year, is crimping growth, even at businesses that provide essential services and earn monthly revenue. ARPU will likely also decline, according to analysts.
Chris Lane, an analyst at Sanford C. Bernstein & Co said that part of the decrease in wireless subscribers could be due to migrant workers — who often have one subscription for where they work and another for their home region — canceling their work-region account after the virus prevented them from returning to work after the Lunar New Year holidays which began in late January.
While the drop in users is unusual, the total is small relative to total wireless subscriptions, which have risen to a combined 1.6 billion for the three carriers. Things may improve starting this month as work in factories and other businesses in China resumes, Lane said.
Net income fell 9.5% last year at China Mobile, partly on government mandates to cut prices and improve service, but also due to a spike in financing costs – up from RMB144 million ($20.2 million) to RMB3.25 billion ($460 million).
The company, which reported earnings last week, told analysts revenue would remain stable this year, a sign management was not worried about the fall in subscribers.
China Unicom overcame flat revenue growth to post an 11.1% increase in net earnings for 2019. The state-owned telco slashed opex by 22% and marketing cost by 5% to record a 11.3 billion yuan ($1.6 billion) full-year profit.
“In 2019, the domestic telecommunications industry development experienced a short-term pain with weak revenue growth and pressure on industry value,” Chairman and CEO Wang Xiaochu said.
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Co-build and Co-share Agreement:
In September 2019, China Unicom entered into a cooperation agreement with China Telecom to jointly build one 5G access network across the country. China Unicom would be doubling it’s own 5G network coverage, bandwidth, capacity and transmission speed, providing users with better experience.
China Unicom said it will actively step up the “co-build and co-share” with China Telecom in areas such as 4G indoor distributed antenna systems, server rooms, optical fiber and pipelines to further enhance network advantages and corporate value.
References:
https://www.bnnbloomberg.ca/china-s-mobile-carriers-lose-15-million-users-as-virus-bites-1.1410626
https://www.telecomlead.com/5g/china-unicom-reveals-5g-network-capex-plans-94530
China Mobile has 15.4 million 5G customers; 5G+ is primary focus area
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.”
Business 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.
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References:
https://www.chinamobileltd.com/en/file/view.php?id=226450
https://www.chinatechnews.com/2020/03/19/26442-china-mobile-net-profit-down-9-5-in-2019
https://www.lightreading.com/asia/china-mobile-reports-154m-5g-customers/d/d-id/758329?
China’s big 3 mobile operators have 9 Million 5G subscribers in advance of the service; Barron’s: China to lead in 5G deployments
According to Beijing News, the three major (state owned) China mobile network operators have already signed up 9 million advance orders for their yet to be launched 5G service. As of October 5th, China Mobile’s 5G subscribers have reached 5.32 million, China Unicom has 1.75 million, China Telecom has 1.76 million, and the total number of committed 5G users is nearly 9 million.
The three China network operators haven’t set a date for the start of service, but will reportedly commence simultaneously, most likely later this month of October. However, there are not many 5G smartphones (only two or three models) and no other endpoints (none announced yet) available from the three major China network operators. The preferential price is between 150 yuan and 550 yuan.
On September 20, Xu Ximing, deputy general manager of the marketing department of China Mobile Group Corporation, said at the China Mobile 5G+ Innovation Cooperation Conference that China Mobile is accelerating the pace of 5G commercialization. The 5G package will be officially released in October, including basic packages and CPE packages. And upgrade plans for old users. Customers will enjoy the “three different fast” login to the 5G network, that is, the 5G terminal does not need to change the card, does not need to change the number, does not need to register, and multi-channel fast order 5G network service.
- The China Unicom prices web page shows that the current campaign supports two mobile phones, Samsung Note 10+5G version offers 500 yuan, and vivo’s iQOO Pro 5G version offers 400 yuan. Telecom’s purchase discounts are 150 yuan for iQOO Pro, 300 yuan for ZTE Axon 10 Pro, and 550 yuan for Samsung Note 10+.
- For China Mobile’s preferential prices, Xiaomi 9 Pro 5G version is offered for 300 yuan, China Mobile’s pioneer X1, Samsung Note 10+ 5G version offer is 500 yuan. China Mobile told the Beijing News that more 5G models will be added in the future.
China Mobile Pioneer X1 is powered by a Qualcomm Snapdragon 855 chipset, a 6.47-inch AMOLED display with a waterdrop notch. The display supports FHD+ resolution and also houses an on-screen fingerprint scanner. Housed inside the waterdrop notch is a powerful 20MP camera.
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Note: Although Samsung continues phone sales in China, last week the handset maker ceased its mobile phone production operations in China as it closed its last factory in the country, according to Reuters.
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China’s 5G network coverage is progressing rapidly and the 5G network is increasingly equipped with a formal commercial foundation. Recently, the official statistics of the Beijing Municipal Bureau of Economics and Information Technology state that the three major network operators have completed more than 8,800 5G base stations in Beijing, covering areas along Chang’an Avenue, the World Expo, CCTV Broadcasting Center, and Shougang Park.
According to a message released by the Beijing Communications Administration, it is expected that by the end of 2019, Beijing will build more than 10,000 5G base stations. According to the current construction progress, the number of 5G base stations in Beijing is expected to reach 12,000 by the end of the year. Among the other three first-tier cities, Shanghai plans to build 10,000 5G base stations in 2019 and 20,000 5G base stations in 2020; Guangzhou proposes to complete no less than 20,000 5G base stations in 2019, and 5G will be built in 2021. The base station is 65,000; the plan for Shenzhen is to build 15,000 5G base stations by the end of 2019.
With the spread of 5G networks, innovative applications in various 5G environments are emerging and even landing. On September 25, Daxing International Airport was officially opened. Eastern Airlines, Beijing Unicom and Huawei jointly released a 5G-based smart travel integrated service system at Daxing International Airport. Under the system, the user does not need to present the ID card and the QR code as usual, and only needs face recognition to complete the travel process such as ticket purchase, check-in, check-in, security check, and boarding.
China’s government is partially subsidizing 5G deployments as we note in several paragraphs below:
- The Shenzhen city government is offering to pay operators RMB10,000 ($1,398) for every standalone 5G base station deployed, with a maximum payout of RMB150 million ($20.9 million). Its 5G plan issued last month promises support for site acquisition and subsidies for base station electricity costs. The tech-dominated Chinese city, home to Huawei, ZTE and Tencent, plans to install 15,000 5G base stations by the end of 2019 and 45,000 by next August (more on this below).
- Almost every Chinese city or provincial government has a 5G development plan. While many are light on specifics, some reveal big ambitions. For example, the government of Zhejiang, the wealthy province near Shanghai, expects to have 30,000 base stations next year. It plans to complete its 5G rollout by 2022, by which time its coverage will “lead the country.”
- The north-west province of Shanxi — not known for its advanced tech industries — has also made 5G a top priority. It has bench marked its 5G rollout against other provinces and, like Zhejiang, has set a target of 30,000 base stations by 2022. And the city is also offering subsidies for base station power costs and help in site selection.
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From an article titled, “The Real 5G Winner Could Be China,” in the October 7, 2019 print edition of Barron’s:
Multiple Wall Street analysts are getting more optimistic about China’s 5G build out. For instance, Rosenblatt Securities notes that local governments in the Asian country are providing subsidies to “speed up 5G network deployments.” As a result, Rosenblatt says, more than 300 cities in China will have 5G networks by the end of next year. Even Hall, the Goldman Sachs 5G skeptic, expects 120 million 5G smartphones to ship next year, largely because of China’s aggressive build out.
In a report this past week, Piper Jaffray analyst Harsh Kumar cited a Chinese think tank that sees China-based companies spending $411 billion on 5G networks from 2020 to 2030. Of the 600,000 5G base stations expected to be rolled out worldwide next year, Kumar says half will be deployed in China: “We expect 2020 global [5G] deployments to largely be driven by the Chinese market.”
5G may come together slowly in the U.S. market, but China is serious about winning the race.
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References:
https://tech.sina.com.cn/t/2019-10-06/doc-iicezzrr0343842.shtml
https://www.lightreading.com/asia-pacific/china-telcos-rack-up-9m-5g-advance-subs/d/d-id/754643?
https://www.barrons.com/articles/the-real-5g-winner-could-be-china-51570228459
https://www.wsj.com/articles/in-the-race-to-dominate-5g-china-has-an-edge-11567828888
Conflicting reports: Huawei and China Mobile may buy Brazil carrier Oi
The O Globo website reported on Saturday that Huawei is joining forces with China Mobile to buy struggling Brazilian carrier Oi, in an attempt to boost their footprint in Latin America’s largest market. The two Chinese companies anticipate a significant growth in business once Brazil starts deploying its 5G network. Oi’s 360,000 kilometers of fiber infrastructure is seen as an attractive asset.
Oi declined to comment on the matter, while Huawei and China Mobile did not immediately respond to Reuters’ requests for comment.
However, on Sunday Huawei told Reuters it was not interested in acquiring struggling Oi or any other Brazilian carrier.
“Huawei has no plan or interest in acquiring Oi or any other Brazilian carrier. In Brazil for more than 20 years, the company is working with all major Brazilian carriers supplying the best products and solutions to support digital transformation in Brazil,” the company said in an emailed statement to Reuters.
It would be very strange for Huawei to invest in a telecom carrier which is traditionally its bread and butter customer!
Brazil’s largest fixed-line carrier has been struggling to turnaround its business since it filed for bankruptcy protection in June 2016 to restructure approximately 65 billion reais of debt. Oi is also negotiating its network with Spain’s Telefonica and Telecom Italia, AT&T and another (unnamed) Chinese company.
Speculation of the bid comes as Brazil’s Senate approved a bill to update the country’s obsolete framework for telecommunications, paving the way for Oi to implement a plan to sell up to $2 billion in non-core assets. Earlier this week, Suno Notícias reported that China Mobile has filed a request to operate in Brazil and eventually acquire Oi. The country’s telecom regulatory agency Anatel said Sept. 17th it didn’t have any official information regarding the request.
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Addendum: Huawei launches new ‘Vision TV’ with 4K quantum dot color, which comes in 55″/65″/75″ sizes. Media paying attention to the fact that Huawei is adopting QD technology, which until now has been a key technology for Samsung’s TV (QLED) strategy. (ZDNet)
http://www.zdnet.co.kr/view/?no=20190920082939
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References:
China Mobile reveals 5G network expansion plans; China Telecom and China Unicom agreement on 5G network sharing
Lu Lu, a senior researcher at the China Mobile Research Institute, said in an industry speech last week that China’s largest wireless network operator expects its 5G network to reach 50 cities by the end of 2019 and 300 major cities by the end of 2020. Ms. Lu said that China Mobile aimed to reach commercial scale in 5G by June next year and that 5G private networking will be a major new enterprise network service. Edge computing, which was not used for 4G-LTE, was seen as essential for delivering customizable private networks, she said. The flexible architecture of the new 5G network was the critical factor, allowing for much more granular services and applications.
In addition, China Mobile is planning to offer network slicing services by the middle of next year when its standalone 5G network achieves commercial scale. That despite no standards for network slicing interoperability between different vendors.
“At present, China Mobile has reserved hundreds of nodes in edge computing rooms. Based on these nodes and 5G networks we will carry out trials of relevant edge computing services,” Lu said. China Mobile and its partners hoped to provide “full-stack edge-computing capabilities to industry customers,” she added.
The Chinese telco is building a “one-stop cloud-network convergence platform” that can provide customized service capabilities in both centralized data centers and data centers at the edge of cities around the country, Lu said. The operator has issued network slicing templates for six industry verticals — power grid, autonomous driving, gaming, entertainment, banking and medical. In partnership with Ericsson, China Mobile exhibited a network slicing-based autonomous vehicle application at MWC2019 in Barcelona earlier this year.
Earlier this year, Ms. Lu delivered a speech to introduce the achievements of the cooperation between China Mobile, Huawei, and Baidu, and elaborated on the concept of “5G network as a service”. She also invited partners to jointly build the 5G ecosystem and continuously promote the maturity of 5G technologies and industry development.
China Mobile Executive Vice-President Li Zhengmao has said he believes private networking and network slicing offered some of the best prospects among new 5G services.
“Operators can create a network-slicing-as-a-service business model, providing high-reliability, high-performance and easy deployment for the vertical industry through a centralized network slicing service platform,” he said in an interview with state news service Xinhua.
But he acknowledged that the lack of clear business models in industry partnerships was one of the biggest problems.
China Mobile has set up a 5G Joint Innovation Center to drive application development, with more than 500 industry partners and more than 400 vertical industry partners, Li said.
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Separately, China Telecom and China Unicom, agreed to share the efforts to build and maintain 5G radio access networks across the country. The purpose is to accelerate deployment and slash associated infrastructure costs.
Each wireless carrier will be responsible for operating their own core networks, but will share spectrum resources and a single RAN network (which typically accounts for around 80 per cent of an operator’s capex). Under the agreement, the two companies will be individually responsible for construction and maintenance in specific regions.
In a statement China Telecom said: “The commencement of the co-build and co-share cooperation is beneficial to the efficient construction of [the] 5G network and will rapidly create 5G service capability to enhance network quality and business experience.”
It added the reduced costs would reinforce market competitiveness and achieve a win-win for both parties.
Both operators will continue to handle core networks and branding completely independently, with the collaboration only applying to the construction and ongoing maintenance of physical infrastructure assets. The network will use the companies’ combined spectrum.
In 2016, the operators collaborated on 4G network construction, a move which reportedly saved China Unicom millions in capex within the first year and helped the two better compete with the country’s largest operator, China Mobile.
References:
https://www.huawei.com/en/press-events/news/2019/4/huawei-china-mobile-baidu-5g-vertical-lan
China Wireless Carriers Consider 5G Partnership Amidst 5G Budget Constraints in 2019
Chinese mobile operators may be soon working together to build 5G networks in order to limit the costs, the Nikkei Asian Review reports. And why not- all three are state owned!
China’s second- and third-ranked mobile carriers, China Telecom and China Unicom area already close to an agreement. Number one China Mobile hasn’t commented yet. Please see China Mobile chairman’s statement in the last paragraph below.
China Telecom Chairman and CEO Ke Ruiwen said that his company is in “deep consideration” to jointly build a 5G network with China Unicom. He confirmed that top management on both sides have already reached a “high level of consensus” on the matter and “substantial progress” has been made toward a final deal.
“Co-building and co-sharing would bring great savings in capital expenditure, operating expenditure, as well as improve resource utilization,” Ke said, without revealing any numbers that might quantify the cost savings.
The 5G partnership was hinted at by China Unicom Chairman and CEO Wang Xiaochu earlier. During the company’s first-half earnings briefing, Wang floated the idea of a “co-built, co-shared” 5G infrastructure. Wang left the door open to cooperating with China Mobile and China Broadcasting Network, which were granted 5G licenses in June, but said China Unicom was “mutually complementary” with China Telecom, noting their strengths in different regions of the country.
The Chinese government hopes that developing a 5G network will help buoy the economy, but the three major mobile carriers are concerned about expenses and profits. © AP ………………………………………………………………………………………………………..
China Telecom’s Ke also mentioned these advantages at the operator’s first-half results presentation. Although Ke dodged questions from reporters in Hong Kong about the savings on investment and when an official agreement would be signed, he confirmed that top management on both sides have already reached a “high level of consensus” on the matter and “substantial progress” has been made toward a final deal.
Both mobile carriers are limiting their 5G investment budgets this year. China Telecom is keeping its budget unchanged from the beginning of the year at 9 billion yuan ($1.27 billion), while China Unicom is holding within the previously committed range of 8 billion yuan.
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The chief uncertainty about such a 5G mobile carrier partnership is about exactly what facilities the operators would share? Making use of the same cell towers, poles and other “passive” infrastructure would be no great leap. Through China Tower-a jointly owned telecom infrastructure business- all three mobile network operators have already pooled mobile towers to reduce costs.
China Tower is a joint venture of the three major Chinese mobile carriers. Chairman Tong Jilu told reporters on Aug. 7 that the cell-tower builder has not changed its annual capital expenditure budget of 30 billion yuan since the beginning of the year. Tong stressed that his company’s investment “is up to the telecom operators,” adding the annual investment “would not likely exceed the budget.”
China Tower said earlier this month that it had received client demands to install 65,000 5G base stations to date, a number that it expects to rise to 100,000 by the end of the year.
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Market leader China Mobile has pledged to allocate CNY 24 billion to 5G this year, above the CNY 17 billion suggested in March. Chairman Yang Jie said that its total capital expenditure for 2019 will be under CNY 166 billion, below last year’s CNY 167.1 billion. The company’s 5G investment this year is much smaller than the 38.7 billion yuan reported by Chinese media when 5G licenses were granted in early June. The government aims to spur job creation and support embattled equipment suppliers like Huawei and ZTE as the trade conflict with the U.S. drags on, but the carriers seem to have their own agenda.
Despite the government’s push for swift deployment of a network, Yang said “the peak period of 5G investment will be between 2020 and 2022.” This author completing agrees with that comment with the real investment not starting till 2021 after IMT 2020 RIT/SRIT standard has been completed by ITU-R.
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References:
https://www.telecompaper.com/news/china-telecom-unicom-consider-5g-network-partnership–1305741
https://www.lightreading.com/mobile/5g/chinas-5g-market-has-teething-trouble/d/d-id/753657
China Mobile Explores 5G Tie-Up With National Cable TV Operator
by Liu Yanfei and Yang Ge of Caixin Global
China Mobile Ltd., the world’s biggest wireless carrier by subscribers, said it is talking with a recently formed national cable TV operator about cooperation in upcoming 5G networks and services, as it looks for new income sources to jumpstart its stagnating revenue.
China Mobile controls about 60% of its massive home market, making it flush with cash for aggressive spending on a state-of-the-art 5G network that has become a recent top priority for Beijing. By comparison, China Broadcasting Network Corp. was formed only five years ago by cobbling together many of the nation’s regional cable TV operators, and is relatively cash poor.
China Mobile and its two peers, China Telecom Corp. Ltd. and China Unicom Telecommunication Corp. Ltd., all received 5G licenses when the regulator awarded them in June, a move that was widely expected. But many industry watchers were surprised when China Broadcasting also received a 5G license because the company is relatively cash-poor and also has little or no experience in wireless services.
China Mobile had previously made known its desire to work with China Broadcasting, even though Unicom and China Telecom opposed such a move. China Mobile Chairman Yang Jie told Caixin on Thursday that talks between the two sides have taken place on building and sharing 5G networks, but he added there is nothing to reveal just yet.
“Building and sharing 5G networks is something the nation also supports, and businesses are also quite willing,” he told Caixin on the sidelines of an event to discuss the company’s latest financial results, which were also released on Thursday.
China Mobile Chairman Yang Jie says Thursday in Hong Kong that his company and China Broadcasting have discussed building and sharing 5G networks. Photo: VCG
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A collaboration with China Broadcasting would give China Mobile access to one of the country’s biggest providers of programming via the former’s vast cable network. Such a tie-up could help to reinvigorate China Mobile’s revenues, which have stagnated in recent years as demand for its core wireless voice and data services starts to mature.
On Thursday, China Mobile reported interim results that showed the company’s revenue dipped by 0.9% to 204.4 billion yuan ($29 billion) in this year’s second quarter, while its profit plunged 18.8% to 32.4 billion yuan, according to calculations by Caixin.
China Broadcasting was formed in 2014 by combining many of the country’s regional cable-TV operators. It was originally set up to run cable TV networks, but was granted a license to operate internet and telecom services in 2016.
Before issuing 5G licenses in June, China’s telecom regulator called a meeting with each of the three big carriers’ top officials in charge of network construction, a source close to the Ministry of Industry and Information Technology (MIIT) previously told Caixin. China Mobile raised its hopes of working together with China Broadcasting on that occasion, even though Unicom and China Telecom opposed.
As the nation’s dominant carrier, China Mobile is spending the most aggressively on 5G. Figures from the company indicate it now plans to spend about 24 billion yuan on the network this year. By comparison, Unicom has said it plans to spend 6 billion yuan to 8 billion yuan on 5G this year, while China Telecom has said it plans to spend about 9 billion yuan.
Contact reporter Yang Ge ([email protected]; twitter: @youngchinabiz)
Original article at: https://www.caixinglobal.com/2019-08-09/china-mobile-talks-5g-tie-up-with-national-cable-tv-operator-101449253.html
ZTE and China Mobile demo 5G 8K+VR ultra-wide bandwidth and 5G MU-MIMO at Mobile World Congress Shanghai 2019
by Margaret Ma, ZTE
1. 5G 8K+VR ultra-wide bandwidth:
ZTE Corporation a leading provider of telecommunications, enterprise and consumer technology solutions for the mobile internet, and China Telecom have today demonstrated 5G 8K+VR ultra-wide bandwidth experience at a 5G experience zone at Mobile World Congress (MWC) Shanghai 2019.
The 5G commercial network-based demonstration has not only showcased the excellent performance and business-enabled capabilities of China Telecom’s commercial network, but also reflected ZTE’s excellent 5G end-to-end commercial capabilities, providing a good model for 5G business cases.
ZTE will fully support the construction of China Telecom’s 5G commercial networks, exploring the application and business models of the 5G industry, helping establish China Telecom’s 5G brand leadership and achieve a win-win co-operation in the 5G era.
In addition, for visitors to MWC Shanghai 2019, China Telecom and ZTE have arranged a 5G Tour, travelling 5km with continuous coverage of the 5G network onboard a 5G experience bus. On this trip, visitors can enjoy diversified service experiences, including 5G-8K VR panoramic live streaming, 16-channel HD video live streaming, and 5G commercial smartphone video calls.
A screen on the bus shows the real-time 5G date rate that visitors can achieve, with a peak date rate of more than 1GBPS.
Empowered by the technologies of China Telecom and ZTE, the 5G-8K VR panorama live streaming combines 8K and the VR technology. The images and data captured by a 8K VR 360-degree camera are transmitted through a 5G network, allowing visitors to wear VR glasses and enjoy an immersive viewing experience.
With the capability of providing complete 5G end-to-end solutions, ZTE looks forward to working closely with industry partners to actively promote 5G business applications and practices, thereby facilitating the digital transformation of vertical industries.
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2. 5G MU-MIMO:
In addition, ZTE and China Mobile demonstrated a 5G MU-MIMO (Multi-User, Multiple-Input Multiple-Output) multi-user performance test based on 5G commercial base stations and smart phones at Mobile World Congress Shanghai 2019. The demonstration showcases both companies’ leading positions in commercial performance.
The MU-MIMO makes full use of multi-antenna features to maximize the utilization of spectrum resources, creating much greater revenue for users. It is the core technology of 5G to realize ultra-wide bandwidth.
This MU-MIMO test was carried out in China Mobile’s Guangzhou 5G field, employing ZTE’s industry-leading 160M full-band 4/5G dual-mode commercial base station. The base station supports dynamic spectrum sharing, achieving dual-network integration at 2.6GHz, and 16 ZTE commercial mobile phone Axon10 Pro.
The test result showcased that a 5G single cell throughput is over 3.7Gbps, while a single EU downlink data rate is more than 200Mbps. The result is also a four-time increase in network system capacity than that of the SU-MIMO technology. The test footage and data were also transmitted back to China Mobile’s booth at MWC Shanghai in real time from Guangzhou.
ZTE and China Mobile have been strategic partners for years, working together on 5G technical innovation and industry development. The two parties have witnessed a series of milestones in the path to 5G commercialization. China Mobile and ZTE jointly developed the world’s leading 5G prototype base station, the world’s leading 5G site, the world’s leading 2.6GHz NR IoDT and the world’s leading end-to-end system.
With great capability of providing complete 5G end-to-end solutions, ZTE looks forward to working closely with industry partners to actively promote 5G business applications and practices, thereby facilitating the digital transformation of vertical industries.
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About ZTE:
ZTE is a provider of advanced telecommunications systems, mobile devices, and enterprise technology solutions to consumers, carriers, companies and public sector customers. As part of ZTE’s M-ICT strategy, the company is committed to provide customers with integrated end-to-end innovations to deliver excellence and value as the telecommunications and information technology sectors converge. Listed in the stock exchanges of Hong Kong and Shenzhen (H share stock code: 0763.HK / A share stock code: 000063.SZ), ZTE’s products and services are sold to over 500 operators in more than 160 countries. ZTE commits 10 per cent of its annual revenue to research and development and has leadership roles in international standard-setting organizations. ZTE is committed to corporate social responsibility and is a member of the UN Global Compact. For more information, please visit www.zte.com.cn.
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Media Contact:
Margaret Ma
ZTE Corporation
Tel: +86 755 26775189
Email: [email protected]
References:
New Partnerships Aim to Simplify Global IoT Connectivity & Deployment
Two new partnerships promise to increase global IoT connectivity.
1. Chunghwa Telecom and Tata Communications:
India’s global network operator Tata Communications is partnering with Taiwan’s Chunghwa Telecom to bring global connectivity to consumer electronics and Industrial Internet of Things devices. In a joint press release, the companies said the partnership will enable Chunghwa Telecom to tap into additional revenues by connecting IoT devices through Tata Communications’ MOVE-IoT Connect platform which enables IoT devices to be deployed quickly -both locally and internationally- by leveraging Tata Communications’ ecosystem of mobile network operators worldwide.
The Taiwanese electronics industry output is expected to be worth $228 billion (NT$6.65 trillion) in 2018, and the wearables market grew at double digits in both volume and value terms in 2017. Chunghwa Telecom looks to capitalize on this growth through the existing IoT roaming services the operator provides.
“Our aim is to serve three million IoT devices in the next three years, and Tata Communications will be one of our key partners to fulfill this ambition,” Ming-Shih Chen, president of mobile business group at Chunghwa Telecom.
“Tata Communications MOVE will give our customers’ IoT services borderless network coverage across 200 countries, ensuring a consistently high-quality and reliable user experience.”
One of Chunghwa Telecom’s first Tata Communications’ MOVE – IoT Connect customers is TaiDoc Technology, which manufactures premium medical devices to improve people’s health and quality of life. TaiDoc will use Tata Communications MOVE – IoT Connect to extend the reach of its devices to countries such as China, Thailand and the U.S.
“Our aim is to serve three million IoT devices in the next three years, and Tata Communications will be one of our key partners to fulfil this ambition,” said Ming-Shih Chen, President of Mobile Business Group, Chunghwa Telecom. “Tata Communications MOVE™ will give our customers’ IoT services borderless network coverage across 200 countries, ensuring a consistently high-quality and reliable user experience. At the same time, we’re able to extend our business easily by being part of the Tata Communications’ MOVE™ ecosystem of mobile network operators. It’s a win-win for us.”
“IoT devices require borderless, secure and scalable connectivity to enable the capture, movement and management of information worldwide. Cellular connectivity is an effective foundation for IoT services, but the problem is that today’s mobile networks are inherently local – there is no such concept as a global mobile network,” said Anthony Bartolo, chief product officer at Tata Communications.
“We want to change that. We’re excited to work with Chunghwa Telecom and other leading mobile network operators around the world to build a truly global ecosystem of connectivity, and spur IoT adoption by businesses worldwide.”
References:
https://www.telecomasia.net/content/chunghwa-telecom-tata-com-ink-deal-global-iot-connectivity
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2. China Unicom and Telefonica:
China Unicom has signed an agreement with Spain’s Telefonica designed to simplify and accelerate IoT deployments for their respective enterprise customers globally. The partnership will give the two operators access to each others’ network and allow them to provide IoT products and services across several key markets through a single global SIM card.
The agreement will also consolidate their respective positions in IoT in Europe, Latin America and China, three of the most important IoT markets in the world, the companies said in a joint statement. Enterprise customers of Telefonica and China Unicom will be able to easily and seamlessly deploy IoT products and services in these three regions with a single global IoT SIM card. By using a unified IoT connectivity management platform, they will be able to control connections globally and to localize IoT SIMs once they reach a certain geography (subscription swap), the pair said.
“We are leveraging IoT technologies to accompany our customers on their digital transformation journey, where IoT has a very important role to play. Telefónica IoT is named a Leader in Gartner’s Magic Quadrant for Managed M2M Services worldwide, maintaining that position we have held since inception four years ago…..Simplifying massive IoT deployments is key and therefore we are strengthening our ecosystem of partners. Our partnership with China Unicom will strengthen Telefónica’s capability to meet our global customer needs,” Telefonica chief IoT officer Vicente Muñoz said.
Enterprise customers will be able to enjoy these new IoT capabilities later this year, Muñoz added.
In related news, China Mobile has signed a deal with UK’s Vodafone, under which the pair have agreed to resell each other’s IoT services for the first time. The agreement, announced at the recent Mobile World Congress in Barcelona, will see each company share new IoT project opportunities with their partners.
Vodafone customers will be given access to China Mobile IoT SIMs for deployments in China, while China Mobile customers wanting to offer IoT-enabled products outside of China will do so via Vodafone’s Global IoT SIM and management platform.
Vodafone will manage all elements of the operational model for its customers including on-boarding, SIM and logistics as well as billing and support. The company will act as a single point of contact for its enterprise IoT customers wanting to move into China.
China Mobile will discuss the possibility for IoT sales opportunities with Vodafone for companies wanting to expand outside of China.
Dorothy Lin, China Mobile International’s head of mobile business partnership, said the collaboration with Vodafone will allow the Chinese mobile giant to offer customers the greatest possible reach of IoT services.
“Having reached over 200 million IoT connections last year, China Mobile aims to increase the connections by 60% in 2018,” Lin noted.
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References:
https://www.telefonica.com/en/web/press-office/-/telefonica-and-china-unicom-partner-in-iot
https://www.telecomasia.net/content/china-unicom-telefonica-simplify-iot-deployment-enterprises