China Mobile (CM), the world’s largest mobile network operator, continues to astound with the scale of its numbers after publishing its fourth quarter and full-year 2022 results. The year was marked by growth in all sectors, although that has been common to all three major Chinese telcos for some years, including competitors China Telecom (CT) and China Unicom (CU).
CM’s revenue grew 10.5%, from RMB 848bn to RMB 937bn ($123.3bn to $136.3bn). CT’s revenues were half of that, RMB 440bn at year’s end 2021, though they too grew impressively – by 9.5% to RMB 481bn ($69.95bn). Similarly, Unicom recorded an 8.3% uptick, taking revenues from RMB 327.9bn ($47.68bn) to RMB 354.9bn ($51.6bn).
Profits also soared for the Chinese market leader, growing 8% to RMB 125bn, at 13.4% of revenue. This share is unmatched by CT and CU which clocked in at 5.7% and 4.7% of revenues, for YOY growths of 6.3% and 16.5% respectively.
CM’s network, which it is now sharing with new market entrant China Broadnet (CBN), has grown to 1.285m 5G base stations, up by 548 000 over the year. The lion’s share of this, 480 000 towers, is provided by CBN’s 700 MHz network.
China Mobile is paying for the 700 MHz build-out, which could cost up to $15bn, in return for access to this spectrum and network, which provides better rural coverage than CM’s mid-band frequencies. CBN can use the larger MNO’s 2G and 4G networks for fallback, though only for the first year of operation, and CM is providing backhaul and network management services.
CT and CU are also engaged in a network-sharing agreement, though at a more comprehensive scale than CM and CBN, whose relationship places CBN somewhere between a fully-fledged MNO and an MVNO on CM’s network.
CT and CU fully share network infrastructure and together manage a 5G network comprising 1m base stations. About a third of that, 310k, was added over the course of 2022. CU boasted 212.73m 5G subscribers at year’s end out of 322.7m mobile subscribers.
CT on the other hand reported a total of 391m mobile subscribers, 268m of which were claimed as using 5G services. CM’s 5G customer numbers grew by 220m to 614m, bringing its total mobile customer base to 975m at year’s end, an 18m increase YoY.
CT and CU’s shared 5G network is rather an oddity globally, though not in China, where the three operators have been sharing tower infrastructure through their joint ownership of China Tower since as far back as 2014.
Around the world, the picture is somewhat different. While operators are not opposed to resource sharing in principle, in practice sharing is restricted to passive infrastructure, with only rare forays into the active RAN. Fully-shared networks are ideas only entertained on the fringes of the mainstream in Malaysia, Mexico, and Russia, and even there the degree of sharing varies wildly.
The greatest benefit of shared network infrastructure lies not surprisingly in CAPEX and OPEX savings. CT and CU estimate savings from their joint 5G network at around RMB 270bn ($40.5bn) in CAPEX cumulatively, and RMB 30bn ($4.5bn) in yearly operating expenses.
These are significant savings, especially in light of the high annual operator CAPEX figures. CT plans to invest RMB 99bn ($14.85bn) in 2023, up from RMB 92.5bn in 2022, while CU is growing its CAPEX budget from RMB 74.2bn ($11.1bn) to RM 76.9bn ($11.5bn). CM has other plans for 2023, planning to reduce its CAPEX slightly from RMB 185.2bn ($27.8bn) to RMB 183.2 ($27.5bn).
The government thinktank, China Academy of Information and Communications Technology (CAICT), forecasts the country will have spent RMB1.2 tn ($180bn) on 5G network construction by 2025, pulling along over RMB3.5tn ($524bn ) upstream and downstream investment in its wake.
All three operators are planning to reduce CAPEX on mobile networks and fiber in favor of their enterprise segment in 2023. CT reduced its spending on broadband fiber and mobile networks to reinforce its Industrial Digitalisation enterprise segment. CAPEX spending on Industrial Digitalization grew from 29.3% of CAPEX in 2021, to 38.4% of an increased total CAPEX budget.
This pivot is a result of the strong double-digit growth in the three carriers’ industrial/ enterprise business segments. CM recorded a 22.6% growth in this area, CT recorded 19.6% YoY growth, and CT’s enterprise segment grew 28.6%.
In China, private networks are deployed through one of the MNOs, with very few exceptions so far. The growth figures for enterprise segments are reflected in an uptick in private networks, either sliced, fully dedicated, or a hybrid of the two. China Unicom reports a total of 1600 fully connected 5G factories, and 3805 customers served by virtual private networks, for a total of more than 5000 industrial 5G projects.
More than 16,000 cumulative 5G industry application projects are also listed. This compares with over 18,000 for CM. China Telecom records more than 15,000 total contracts, with an additional 8,000 in 2022. In the private network market, CM for the first time lags behind one of CU and CT. CU recorded revenues of RMB 3.1 bn from private networks, compared to CM’s RMB 2.55bn.
These shifts in the market are also reflected in the IoT business. CM’s total number of connected IoT devices grew 59.%, from 1.06bn to 1.69bn. CU’s IoT business grew from 295.3m in 2021, to 385.54m, an increase of 30.6%, while CT’s IoT connections numbered 406.6m, up from 297.8m at year’s end 2021, representing a growth of 36.6%.