5G construction costs climbed China Mobile increased revenue does not increase profits
In the role of the traffic dividend disappearance, the industry competition intensified as well as speed and fee cuts and other factors, in recent years, the three major carriers, without exception, fell into a bottleneck in the growth of the collective trend of revenue decline.
However, in the first half of 2020 just past, the operating income of all three operators realized positive growth. According to the Ministry of Industry and Information Technology released the economic operation of the communications industry, the first half of 2020, China's telecom business revenue totaled 692.7 billion yuan, an increase of 3.2%. Among them, China Mobile's revenue amounted to 389.9 billion yuan, up 0.1% year-on-year; China Telecom's revenue amounted to 193.803 billion yuan, up 1.7% year-on-year; and China Unicom's revenue amounted to 150.4 billion yuan, up 3.8% year-on-year. In terms of net profit, China Unicom's net profit was 3.344 billion yuan, up 10.9% year-on-year; China Telecom's net profit was 13.949 billion yuan, up 0.3% year-on-year; and only China Mobile fell 0.5% year-on-year to 55.77 billion yuan.
Some securities analysts told Nandu that the profit growth of Unicom and Telecom is related to cost control. Wang Xiaochu, chairman of China Unicom, also said on the earnings call that the growth was due to "continued good control of capital expenditures and efficient operations", including control of 5G capital expenditures, strict control of subscriber development costs, cleaning up inefficient and ineffective products and channels, etc.
This is the first time that China Unicom has reported its profit growth to the government.
The report shows that in the first half of this year, China Telecom's selling, general and administrative expenses amounted to 25.997 billion yuan, a year-on-year decline of 11%; China Unicom's selling expenses amounted to 14.88 billion yuan, a year-on-year decline of 14.8%. In addition, China Telecom and China Unicom's ***build*** enjoyment of 5G networks has also enabled the two to save a lot of network construction expenses. Wang Xiaochu previously revealed that in the five-year construction cycle of 5G, ***build*** enjoy will save 200 billion yuan of capital expenditure for each of China Unicom and China Telecom.
And as explained in China Mobile's financial report, its operating expenses in the first half of the year amounted to 330.745 billion yuan, an increase of 1.073 billion yuan year-on-year. Among them, due to the 5G network, the expansion of the data center scale, the network operation and support costs due to faster growth in electricity costs increased by 11% year-on-year, becoming the main reason for the climb in operating expenses.
China Telecom's mobile subscribers surge, becoming the biggest beneficiary of portability
According to the monthly operating data of the three major carriers, as of the end of June 2020, China Mobile's mobile subscribers stood at 946 million, ranking the first in the industry, while China Telecom's mobile subscribers stood at 343 million, ranking the second in the industry; China Unicom has 309 million mobile users, ranking third in the industry.
However, it is worth noting that in the first half of China Mobile's net loss of 3.53 million mobile subscribers, China Unicom's net loss of 8.947 million mobile subscribers, while China Telecom's mobile subscribers realized a net increase of 7.9 million. Industry analysts said that it is not difficult to see that China Telecom has become the biggest beneficiary of the new policy.
From the three financial reports, fixed-line broadband business is becoming one of the three major operators revenue growth of the new power. In the first half of the year, China Mobile's broadband revenue amounted to 36.368 billion yuan, an increase of 10.59% year-on-year; China Telecom's broadband revenue amounted to 35.3 billion yuan, an increase of 0.5% year-on-year; China Unicom's broadband revenue amounted to 21.9 billion yuan, an increase of 5.9% year-on-year.
At the same time, the three major operators of mobile communications business is not optimistic. In the first half of the year, China Mobile voice revenue fell 15.39% year-on-year, short MMS revenue fell 9.88% year-on-year, wireless Internet revenue increased by only 3.2% year-on-year, the increase is much lower than the same period last year; China Telecom voice revenue fell 11.58% year-on-year, Internet revenue increased by only 4.3% year-on-year; China Unicom voice revenue decreased by 15.5% year-on-year.
The economic operation of the communications industry in the first half of 2020 released by the Ministry of Industry and Information Technology (MIIT) also reflects this trend, with fixed communications business revenue in the first half of the year growing by 12% year-on-year, and mobile communications business revenue declining by 0.9% year-on-year. As of the end of June, the total number of cell phone subscribers of the three basic telecommunication enterprises amounted to 1.595 billion, and the total number of fixed Internet broadband access subscribers amounted to 465 million. In terms of telecom business usage, the decline in cell phone calls gradually narrowed, and mobile Internet traffic through cell phones increased by 30.4% year-on-year.
"New infrastructure" into the highlights of the financial report, Guangdong, a number of data centers to be put into production
Digital transformation has become the same direction of the operators in recent years **** in the first half of 2020, cloud computing, big data and other "new infrastructure" business has also become the operators of the "new infrastructure" business.
According to the financial report, in the first half of 2020, China Mobile IDC and cloud computing revenue increased by 29% year-on-year, Internet of Things and big data revenue increased by more than 50%; China Telecom industry cloud revenue increased by 30.4% year-on-year, Internet of Things revenue increased by 15.5% year-on-year; China Unicom IDC and cloud computing revenue increased by 29% year-on-year, Internet of Things and big data revenue increased by more than 50%.
The three major carriers have also begun to accelerate the exploration of the realization of 5G application scenarios. For example, government and enterprise customers and other B-end market is regarded by China Mobile as a "blue ocean", in July this year, they launched a 5G private network products, technology, operation of three systems, its 5G private network contains "preferential, exclusive, enjoy" three modes. China Unicom released three "5G private network products" and two "5G private line products" at the 5G+Industrial Internet Promotion Conference on August 18, which are the important foundation for the commercialization of 5G in vertical industries.
In addition to the 5G network investment, operators have also started the data center investment plan. Nandu reporter learned from China Mobile, the company intends to accelerate the construction of mobile cloud infrastructure, to further improve the layout of IT cloud resources; optimize the formation of "3 (hotspot regional centers) + 3 (inter-provincial center) + X (provincial center + business nodes)" data center layout. China Telecom revealed that the company will continue to accelerate the construction of large-scale data centers in Beijing, Tianjin, Hebei, Yangtze River Delta, Guangdong, Hong Kong, Macao, Sichuan, Chongqing and Shaanxi.
Guangdong Mobile told Nandu reporters that they will put into operation in 2020, Guangzhou, Shantou, Zhanjiang data center phase I and II project, 2021 proposed to put into operation in Dongguan data center phase I and II project, these projects are mainly used to meet the regional network cloud business and provincial IDC business needs. Guangdong Unicom, on the other hand, revealed that the company's Internet base phase I Guangzhou Zhongxin Knowledge City project, Guangzhou Unicom Baiyun North, Shenzhen Unicom Banxuegang, Foshan Unicom Sanshan and other four key large-scale data center projects, will be put into operation throughout the year before the end of the year, to comprehensively help the development of industrial Internet and big data.
5G half-year investment totaled about 88 billion base station annual target or completed ahead of schedule
In accordance with the 2019 financial report, the three major carriers in 2020 will build 500,000 base stations. Among them, China Mobile will build 250,000 new 5G base stations, and China Telecom will build about 250,000 5G base stations with China Unicom***, covering all cities at the prefecture level (inclusive) across the country. Among them, China Telecom is responsible for the construction of 140,000 stations, China Unicom is responsible for the construction of 110,000 stations, the overall distribution of the "South Telecom, North Unicom" characteristics.
Nandu reporter compared the three operators in the first half of 2020 financial report found that in the first half of this year, China Mobile has opened a total of 188,000 5G base stations in more than 50 cities in China; China Telecom completed the opening of the first half of the 5G base station of about 80,000; and China Unicom has added more than 50 key cities to ****build*** enjoy the 5G base station of about 150,000 stations.
Data from the Ministry of Industry and Information Technology (MIIT) shows that by the end of June, the total number of 5G base stations in China had reached 410,000 stations. In the first half of the year, the capital expenditure of the three major operators for 5G network construction totaled about 88 billion yuan, with China Mobile, China Unicom and China Telecom investing 55.2 billion yuan, 12.6 billion yuan and 20.1 billion yuan respectively. If still in accordance with the capital expenditure plan announced at the beginning of the year, that is, China Mobile is proposed to invest about 105 billion yuan for the year, China Unicom estimated investment of 35 billion yuan for the year, China Telecom estimated 45.3 billion investment for the year to project, the three major carriers in the second half of the year, there are 97.347 billion yuan for 5G budget on the road.
With the accelerated progress of 5G construction, the 5G base station target will be completed ahead of schedule. Wang Zhiqin, vice president of the China Academy of Information and Communications Research, said recently that from the current progress of the three major operating companies, it is expected that in September it is possible to fully complete the full year of the target. 7 August, China Mobile Vice President Li Huiyun also said that the construction of the year is expected to be completed by the end of August this year, the construction progress is far more than the time schedule.
On the current trend, the 5G base station in 2020, the construction target is likely to continue to "increase". Recently, China Mobile said that the number of new 5G base stations will be raised to 300,000 for the year. China Unicom said that by the end of the year, the available 5G base stations will be more than 300,000 stations, covering all cities in the country. And the Ministry of Industry and Information Technology (MIIT) expects that by the end of this year, operators will deploy more than 600,000 5G base stations, covering cities above prefecture level across the country.
"In fact, operators are not just 'seeking fast' in 5G construction, but toward the goal of 'fast and good'." Some telecom industry insiders told Nandu reporters that Guangdong Telecom and Guangdong Unicom have recently jointly completed the verification of 5G 200MHz ultra-large bandwidth ****build*** enjoyment group network in all 21 cities in the province. In this regard, the relevant person in charge of Guangdong Telecom told Nandu reporters that at present, operators usually use 100MHz frequency bandwidth for 5G network deployment, Guangdong Telecom and Unicom will integrate the frequency bandwidth of the two sides, ****build 200MHz frequency bandwidth 5G network, which improves the network rate and capacity.
With the international standards organization 3GPP announcing the freezing of the R16 standard, the construction of the 5G SA (Independent Grouping Network) network is also speeding up, Zhang Yunyong, general manager of the product center of China Unicom, told the Nandu reporter that this year's bidding for the operator's SA base stations have all ended, and the equipment has arrived to be installed, tuned and tested, optimized, and operated, "We're in the midst of installing it in a tight schedule. It will be very fast." On August 17, Shenzhen officially announced that it had become the first city in the country with full coverage of 5G independent group network (SA). It is understood that Shenzhen 5G base stations have been built more than 46,000.
Output: Nandu Business Data News Department
Coordinator: Zhen Qin Tian Aili