Charts of the Day: China’s Telcos Post Steady Revenue Growth as 5G Takes Off

China’s three major wireless carriers posted solid revenue growth in their latest quarterly reports released this week, as their addition of 5G subscriptions accelerated strongly with encouragement from Beijing.

China Telecom Corp. Ltd. led the trio with 7% year-on-year revenue growth for the quarter, reaching 98.8 billion yuan ($14.8 billion), in a sharp acceleration from just 1.7% growth in the first half of the year, according to Caixin’s calculations using company data. Both China Mobile Ltd., the nation’s dominant carrier, and China Unicom (Hong Kong) Ltd. posted revenue growth of about 4%.

In terms of profit, Unicom led the group with 10.3% growth to 3.2 billion yuan, though that rate was largely the same as the first half of the year. By comparison, China Telecom’s profit grew 6.7% year-on-year during the quarter, accelerating sharply from just 0.2% in the first half of the year. And China Mobile’s third-quarter profit was flat, slowing from 0.9% growth in the first half of the year.

All three companies are racing to sign up subscribers to their recently launched 5G services, which are expected to be a potential new revenue source by encouraging more data use than current 4G services. The three are banking on such a boost to lift their fortunes as China’s mobile market becomes saturated and new customer additions are no longer a source for new revenue growth.

China had about 1.6 billion mobile accounts at the end of September, representing more than one for each of the nation’s 1.3 billion people, as many people now have multiple accounts, according to the nation’s Ministry of Industry and Information Technology (MIIT). The MIIT said this week (link in Chinese) that about 1.3 billion of the nation’s 1.6 billion mobile accounts used 4G service, though it didn’t break down figures for the remaining 300 million accounts.

China Mobile had about 114 million 5G users at the end of September and China Telecom had 60.2 million, according to their latest reports. Unicom has not released 5G figures, but said it will do so starting next year. But the addition of Unicom’s subscribers would almost certainly pass China’s total to over 200 million 5G accounts.

Data research firm IDC has predicted China will be the world’s biggest purchaser of 5G smartphones in 2020, with more than 160 million expected to be sold in China this year, accounting for about 67.7% of the global total. The number of 5G phones could get a lift towards the end of the year with the launch of Apple’s first 5G-enabled models, which hit the market in China on Friday.

Contact reporter Yang Ge (geyang@caixin.com) and editor Gavin Cross (gavincross@caixin.com)

Download our app to receive breaking news alerts and read the news on the go.