China Mobile rides the digital momentum wave

• China Mobile has published its 2023 results, which show significant demand for telco services
• The operator has reported growth across the board, with all-time highs in revenues and profits
• Its subscriber base has also expanded in line with customer base growth experienced by China’s other two major operators

China Mobile has reported record revenues of 1tn Chinese yuan (CNY) (US$139bn) for the full year 2023, driven by services for which demand has surpassed the average growth levels for the industry, according to the telco.

The company’s operating revenues grew by 7.7% year on year, the first time in the telco’s history that its sales have surpassed the trillion-yuan mark, noted chairman Yang Jie.

Of this, telecoms services revenue accounted for CNY864bn ($120bn), marking a year-on-year growth of 6.3%, which is reportedly above the industry average. A main contributor to this performance was a 22.2% year-on-year rise in the so-called “digital transformation revenue”, which represented nearly 30% of all telco services revenue. (Digital transformation revenues are derived from mobile cloud, smart home, enterprise internet of things, or IoT, and bespoke enterprise services.) 

Its net profit has also reached a “record high”, according to Yang, rising 5% to CNY132bn ($18bn). The company claimed its profitability was one of the highest of all top-tier global telcos.

“In 2023, despite various challenges faced by the company in a complex and severe macroenvironment, we seized the opportunities emerging from accelerated economic and social digital transformation. This helped anchor us in our position as a world-class information services and sci-tech innovation enterprise,” China Mobile’s chair explained, alongside the telco’s earnings release.

Over the course of the year, the Chinese telco giant has also managed to decrease its spending, with capital expenditure (capex) down 1.9% year on year to CNY180bn ($25bn).

The scale of the Chinese market

As the second-largest country in the world in terms of population (1.425 billion people, slightly less than India’s population), and with years of network investments behind it, it’s no wonder that China’s telecom sector is of an almost unimaginable scale. 

China Mobile’s total mobile subscriber count by the end of 2023 stood at 991 million, up 1.6% year on year (16 million additions). Its 5G subscriber base has been growing quickly, ramping up by 42.1% year on year to 465 million. At the same time, the number of customers that have signed up for 5G packages (but don’t necessarily have a 5G-enabled device to be able to use the 5G services) grew by 29.4% to 795 million at the end of last year.

In addition, China Mobile’s wireline broadband customer base grew by 9.6% to reach 298 million by the end of 2023.

Recent figures from the telco’s rival, China Unicom, show that its total mobile subscriber base amounted to 333 million at the end of 2023, with a net addition of 10.6 million throughout the year. The operator previously disclosed that its 5G package subscriber count stood at 259.6 million by the end of last year, an increase of 12%.

China Unicom’s fixed-line broadband subscriber base reached 113 million in 2023, having increased by almost 9.8 million, which marked a 10-year high in net additions. Furthermore, the penetration rate of “gigabit subscribers” hit 22%.

In 2023, the operator booked a 5% year-on-year rise in operating revenue, to CYN372.6bn ($51.8bn), while net profit was up 11.8% to CYN18.7bn ($2.6bn).

The third significant player in the market – China Telecom – also reported gains in 2023. Its operating revenues were up 6.9% to CNY508bn ($71bn), while total profit rose 9.8% to CNY39bn ($5bn). By the end of 2023, China Telecom had a total of 407.7 million mobile users, of which 318.66 million had signed up to a 5G package (with net additions amounting to 50.7 million).  

China Telecom had 190 million fixed broadband subscribers by the end of 2023, having added a total of 9.26 million wireline broadband users in the previous 12 months.

As a result, China’s three main telcos ended 2023 with a combined 1.73 billion mobile subscriptions and a combined 601 million fixed broadband subscribers.

Such numbers require vast scale in terms of network infrastructure: The latest reported figures from the Ministry of Industry and Information Technology (MIIT) in China suggest that the number of 5G base stations deployed across China reached nearly 3.38 million at the end of 2023, while 5G subscriber numbers reached 805 million across the country.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV