Pandemic hits Chinese subscriber figures but 5G growth continues

Pandemic hits Chinese subscriber figures but 5G growth continues

Will 5G growth continue – and eventually boost the pandemic-hit profits of Chinese operators? It’s a pertinent question in the light of first quarter figures from the country’s big three operators.

China Telecom’s net profit for the first quarter of this year was an estimated $821 million. That sounds good but is in fact a fall of 2.2 per cent year-on-year.

China Unicom’s net profit in the same period fell 13.9 per cent year-on-year to around $448 million. Meanwhile, China Mobile, the world’s largest operator, saw its net profit dip 0.8 per cent year-on-year, again in the January to March period, to about $3.32 billion.

None of these figures are bad, but, arguably, without the coronavirus pandemic they could have been better. Subscriber numbers were certainly hit by pandemic restrictions. China Telecom’s numbers fell by just under 5.2 million in the first two months of the year. They picked up in March with more than 6 million net additions. The China Telecom user base at the end of the quarter was 336.6 million.

China Unicom, meanwhile, ended March with 311 million total subscribers; that’s a fall of 12.1 million since the first quarter of 2019. The pandemic, and associated restrictions, led to a loss of 7.78 million users in January and February but Unicom signed up 321,000 subscribers in March.  China Mobile’s total subscriber base fell by 4 million in the first quarter to 946 million.

Meanwhile, 5G take-up continues to grow. China Telecom says it has accelerated the migration of LTE subscribers to its new 5G network. The 12 million next-generation users added in the first quarter bring the total of 5G subscriber numbers to 16.6 million. Not to be outdone, China Mobile says it added 16.3 million 5G subscribers to take its total to 31.7 million in March. 

China Unicom has been more circumspect about 5G. Its chairman says he expects 5G user growth to accelerate in the second half of the year, as the operator speeds up network deployment, prices of 5G terminals decline and more innovative applications emerge. However, actual 5G subscriber figures are not available from China Unicom, which is involved in joint 5G network deployment with China Telecom.

Given the effects of the pandemic on suppressing subscriber numbers, business development, customer acquisition and 5G network deployment, but also boosting data usage, it may take a while before a clear trend emerges. However, as front-runners in global 5G rollout, China’s three operators will probably be pleased to note that consumers are still keen to buy into the new technology.