China's three major operators released the financial report for the first three quarters of 2016 recently.
Overall, the three giants have kept driving 3G subscribers to migrate to 4G and strengthening the operation of data traffic and marked rapid growth in 4G subscribers and mobile service revenue.
Maintaining industry-leading, China Mobile gained almost nearly 55% of the total revenue of the industry, 82.2% of the total net profit and its 4G subscribers accounted for over 70% of the 4G base in the first three quarters. Its mobile traffic rose 109.9% to 3.82 trillion MB while the call duration reduced 2.2%.
China Telecom has performed flat during the period when compared with China Mobile. Increases in revenue and profit happened to China Telecom, of which 4G device subscribers added 49.03 million and the total mobile traffic increased 127% YoY. The average of 4G data traffic consumed per subscriber per month of China Telecom grew rapidly to 920 MB while ARPU increased slightly compared with 2015.
China Unicom has got out of the mess under new leader Wang Xiaochu, but has far to go.
For the operators, the revenue growth does not remain synchronized with the mobile traffic which increases rapidly. The development of data traffic services generates income substitution effect on the traditional telecom industry, which means that voice services are replaced by traffic data services for the price difference between the two services drives subscribers to use OTT services heavily. However, the cost of voice services is much lower than traffic data services, and thus the replacement will rapidly drive down the industry growth.
Besides, the fixed broadband subscribers of China Mobile showed a whisker away from that of China Unicom. And the tower rents the operators, especially China Telecom and China Unicom, should pay were relatively expensive, putting pressure on the profitability for the two giants.