Operating

Three telcos' earning results of the first 3 quarters: who wins 4G subscribers wins the market

Updated:2015/11/10 11:09

Recently, China’s three major operators announced the earning results of the first three quarters in 2015. Judging from the results, the revenue growth of China’s operators is slow and the price scissors of volume and revenue are obvious. The market is saturated today, and the total subscriber number’s tough growth and the huge network investment cost seriously restrict the profit growth, which shows that the competition between the three operators is becoming more and more intense. On the bright side, China’s telecom industry is accelerating the upgrade, which is manifested by the mobile subscribers’ fast migration to 4G, the rapid growth of the traffic data, the great increase of the fixed broadband subscriber number and the sharp decrease of the fixed phone number.

China Mobile reaps 4G dividend while China Unicom hits the bottom

In terms of the revenue, revenue of China Mobile for the first three quarters is CNY 512.74 billion with a year-on-year increase of 6.5%; that of China Telecom is CNY 246.317 billion with a year-on-year increase of 1.1%; that of China Unicom is CNY 211.913 billion with a year-on-year decrease of 1.59%.

We believe that China Mobile’s huge investment in 4G has achieved initial success, and the growth rate of 6.5% is far ahead of the other two operators. Though China Unicom has more subscribers than China Telecom, the revenue of the former is less than that of the latter, which is to say that the ARPU of China Unicom is lower than that of China Telecom and China Unicom needs to put more effort into marketing.

Concerning the net profit, the net profit of the first three quarters of China Mobile is CNY 85.42 billion with a year-on-year increase of 3.4%; that of China Telecom is CNY 16.361 billion with a year-on-year increase of 1.2%; that of China Unicom is CNY 8.181 billion with a year-on-year decrease of 22.55%.

It is obvious that the net profit of China Mobile and China Telecom is growing slowly and that of China Unicom is falling sharply. The embarrassing number is not a bad thing for China Unicom because it has fallen behind obviously in the aspects of base station number and network speed (4G+) in the domestic 4G construction. Therefore China Unicom will lay the foundation for its future development if it increases the construction investment and accelerates the optical network construction investment now. China Mobile has began gaining a harvest of huge profits brought by 4G while China Unicom must take remedial measures and catch up.

The subscribers migrate fast to 4G and China Mobile is far ahead

According to the earning results of the first three quarters, the total number of China Mobile’s subscribers is 823 million with a net increase of 16.27 million. The number of its 3G subscribers is 195 million, and that of its 4G subscribers is 248 million with a net increase of 157 million. The total number of China Telecom’s subscribers is 194 million with a net increase of 8.72 million. The number of its 3G/4G subscribers is 137 million with a net increase of 18.18 million. The total number of China Unicom’s subscribers is 287 million with a net decrease of 287,000. The number of its 3G/4G subscribers is 172 million with a net increase of 23 million.

Since everyone holds a mobile phone and the market is nearly saturated today, it’s too hard for three major operators to develop new subscribers and they should look for value in the stock market, which is not hard to see. Obviously, China Mobile has taken the lead in this aspect with a 4G subscriber increase of 157 million in the first three quarters. In comparison, China Unicom loses its subscribers, which reflects its disadvantage in the competition.

In the aspect of fixed broadband subscribers, the number of that of China Telecom is 111 million and the number of the local fixed telephone subscribers is 137 million. The number of China Unicom’s fixed broadband subscribers is 71.692 million and its local fixed telephone subscriber number is 76.522 million.

In a word, the number of the operator’s fixed broadband subscribers is increasing rapidly while that of the local fixed telephone subscribers is decreasing sharply. This has been the trend in recent years and it will continue and be accelerated.

The traffic data grows rapidly and operation is a priority

China’s telecom business has reached over CNY 1.6 trillion in the first three quarters of 2015 with a year-on-year increase of 25.3% while three operators’ total revenue is less than CNY 1 trillion with a year-on-year increase of 3%. The price scissors of volume and revenue of the telecom industry is very obvious. The earning result of China Mobile especially mentioned that its traffic data is 1.82 trillion MB with a year-on-year increase of 151%. The total call duration is 3.17 trillion minutes with a year-on-year decrease of 1.2%. The SMS usage is 426 billion with a decrease of 6.4%.

It is clear that the trend of telecom service is from voice and SMS to data, and it is more and more obvious. Inside the operators, the traffic data operation has been put forward for many years but doesn’t get a good result up to now. The earning results have clearly showed that the operator must raise the traffic data operation to a higher strategic level and innovate substantially in technology and business mode, which makes it possible to maintain growth in the future.

 Source:c114
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