Operators' first-half report card released: 5G user scale reaches nearly 500 million, competing for 5G applications in the second half

Recently, the operating data of the three major operators in June were all released. In this report card, the total number of 5G package users is close to 500 million (493 million), and the number of wired broadband users is about 480 million. With the end of the first half of the year, the competition in the second half has begun. Among the "three pillars" of 5G - base stations, users, and applications, only 5G applications need to be vigorously boosted, which is also the common direction of the three major operators' efforts in the future.

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The number of 5G package users has grown rapidly, with a penetration rate of over 30%.

As of the end of June, the number of 5G package users of China Telecom, China Mobile and China Unicom reached 130 million, 250 million and 113 million, respectively.

Judging from the data, China Mobile's 5G package users are far ahead. In June, China Mobile's net increase in 5G package users was 28.745 million, reaching a total of 250.695 million; China Telecom's net increase was 6.66 million, reaching a total of 131.15 million; China Unicom's net increase was 7.236 million, reaching a total of 113.33 million.

China Telecom and China Unicom's 5G penetration rate is a strong point. This month, China Unicom came from behind to take the lead, with a 5G penetration rate of 36.45%; China Mobile, which had the lowest penetration rate, increased by nearly 3 percentage points from the previous month to 26.5%; China Telecom, which fell to second place for the first time, maintained its 5G penetration rate at a high level of 36.18% through the promotion of networks, applications and terminals.

In terms of mobile users, the three major operators continued to achieve positive growth. In terms of wired broadband business, operators have formed a complete system for the continuous growth of fixed-line revenue by continuously increasing fiber investment, optimizing broadband quality, and improving rural universal service coverage. In the fixed-line broadband market, China Mobile occupies 46% of the market share, while China Telecom and China Unicom account for 35% and 19% respectively.

Telecom business revenue totaled 753.3 billion yuan, and the telecommunications industry was rated as "outperforming the market"

On the same day that the operators released their June operating data, the Ministry of Industry and Information Technology released data on the "Economic Operation of the Communications Industry in the First Half of 2021", which showed that in the first half of the year, total telecommunications business revenue reached 753.3 billion yuan, a year-on-year increase of 8.7%, an increase of 2.2% from the first quarter.

Figure: Cumulative growth rate of telecommunications business revenue and total telecommunications business volume from January to June 2020 to 2021

In addition to the accelerated growth of data and Internet business revenue. In the first half of the year, emerging businesses were the biggest highlight of operators' business revenue. The Ministry of Industry and Information Technology said that the three basic telecommunications companies actively developed emerging businesses such as IPTV, Internet data centers, big data, and cloud computing. In the first half of the year, they completed a total of 114.5 billion yuan in emerging business revenue, a year-on-year increase of 27%, accounting for 15.2% of telecommunications business revenue, driving a 3.5% increase in telecommunications business revenue. Among them, cloud computing and big data revenues grew by 96.7% and 31.3% year-on-year respectively.

Recently, China Telecom released an announcement on the Hong Kong Stock Exchange, predicting that its operating income in the first half of the year will be about 213.606 billion yuan to 218.417 billion yuan, a year-on-year increase of about 11% to 13.5%; the net profit attributable to the parent company's shareholders will be about 17.576 billion yuan to 17.855 billion yuan, a year-on-year increase of about 26% to 28%. Based on this, Credit Suisse released a research report, maintaining China Telecom's "outperform" rating and raising its target price by 10.6% to HK$3.88.

The second half of the competition begins, and 5G applications are the core

The relevant person in charge of the Ministry of Industry and Information Technology pointed out that my country has built the world's largest 5G independent networking network, opened 961,000 5G base stations, promoted the construction and sharing of 478,000 base stations, and the number of 5G terminal connections reached 365 million. From January to June this year, the domestic shipment of 5G mobile phones reached 128 million units, accounting for 73.4%. In addition, the trend of 5G application empowerment and integration into thousands of industries has become significant.

The newly released "5G Application "Sailing" Action Plan (2021-2023)" clearly states that in 2023, the penetration rate of 5G individual users will exceed 40%, and the number of users will exceed 560 million. That is to say, the average annual increase in 5G network customers will be more than 140 million in the next three years; it is required that by 2023, there will be 18 5G base stations per 10,000 people. Based on the current 960,000 5G base stations, 1.56 million new 5G base stations will be added in the next two and a half years. This is a major test for operators.

More importantly, 5G applications are important. Recently, China Telecom launched the industry's first operator 5G converged application open laboratory (5G OpenLab). This laboratory is conducive to promoting the scale of 5G applications and is a major strategic layout of China Telecom.

While facing the broader 5G application market, China Unicom is also thinking and exploring how to use 5G to empower thousands of industries. It is understood that China Unicom is focusing on building a 5G cloud-network integrated digital empowerment platform to continuously promote the integrated and innovative development of industries.

China Mobile said that in the new development stage, it will fully implement the "5G+" plan to promote the integration of information services into various industries and serve the public.

At present, operators have won the first half of the battle, but the challenges ahead are still daunting.