The three major operators' Q1 2021 financial reports: revenue and profits both increased, and 5G drove performance back to prosperity

“Plant trees in spring and harvest fruits in autumn.” The 5G construction invested by the three major operators with real money has finally ushered in the first harvest season.

Recently, the three major operators have successively released their performance reports for the first quarter of 2021. The reports show that the revenue and profits of the three operators have increased, and the growth rate is large. Industry insiders all said that after many years, the telecommunications industry has finally ushered in a new round of growth again. And 5G is undoubtedly an important factor in driving the performance to "return to prosperity".

[[396779]]

Data shows that in the first quarter, China Mobile's operating revenue was 198.4 billion yuan, a year-on-year increase of 9.5%; net profit was 24.1 billion yuan, a year-on-year increase of 2.3%. China Telecom's operating revenue was 106.873 billion yuan, a year-on-year increase of 12.7%; net profit was 6.441 billion yuan, a year-on-year increase of 10.6%. China Unicom's operating revenue was 82.272 billion yuan, a year-on-year increase of 11.4%; net profit was 3.843 billion yuan, a year-on-year increase of 21.4%.

Among the many businesses, 5G business has the most obvious driving effect. Yang Jie, chairman of China Mobile, revealed that China Mobile's 5G user ARPU increased by 6% compared with before the migration; in the first quarter, China Unicom's 5G package users increased by 21.02 million to 91.85 million, effectively driving the mobile billing user ARPU to increase by 11.5% year-on-year to RMB 44.6.

Performance data of the three major operators in the first quarter of 2021

Financial report: The first harvest season of 5G has arrived

Once upon a time, operators continued to invest in infrastructure, and the user scale continued to grow, but the investment and scale did not bring corresponding business revenue. Over the years, the "volume-revenue gap" faced by the operator industry has not only not eased, but has widened. The growing mismatch between business volume growth and business revenue growth reflects the decreasing value of the operator industry.

With the advent of the 5G era, the telecommunications industry is looking forward to its arrival, just like previous technological updates, bringing another development climax to operators. Just as expected, the first harvest season of 5G has arrived.

Let's look at China Mobile first. In terms of size and revenue, China Mobile is the largest of the three major operators. As the saying goes, "a big ship is hard to turn around." For China Mobile, although its revenue and profit are unmatched by the other two, its growth rate is not as good as that of China Telecom and China Unicom.

Data shows that China Mobile's operating revenue in the first quarter of 2021 was RMB 198.4 billion, a year-on-year increase of 9.5%; of which communication service revenue was RMB 177.7 billion, a year-on-year increase of 5.2%; EBITDA was RMB 72.1 billion, a year-on-year increase of 5.2%; profit attributable to shareholders was RMB 24.1 billion, a year-on-year increase of 2.3%.

In the first quarter, mobile ARPU was RMB 47.4, a year-on-year increase of 0.9%; at the same time, wired broadband ARPU also increased to RMB 31.8, a year-on-year increase of 1.6%. In the first quarter of 2021, sales product revenue and others were RMB 20.8 billion, a year-on-year increase of 67.0%. China Mobile said that the sales volume of mobile phones increased significantly, mainly due to the abundance of 5G mobile phone models in the terminal market and the lowering of price thresholds.

At present, China Mobile has built more than 410,000 5G base stations, accounting for more than half of the country. Yang Jie, chairman of China Mobile, revealed that China Mobile's 5G user ARPU increased by 6% compared with before the migration, mainly because most of the users who switched to 5G were 4G users with relatively high ARPU, so 5G ARPU was relatively high. As 5G users become more popular, it is estimated that ARPU will decline. In 2021, China Mobile's ARPU is expected to stabilize and rebound, and then remain stable.

Following China Mobile, China Telecom also continued its good momentum. In the first quarter, the company's operating income and profit attributable to shareholders of the company both achieved double-digit growth, and many data set historical highs. According to disclosures, China Telecom achieved operating income of 106.873 billion yuan in the first quarter of 2021, a year-on-year increase of 12.7%; service revenue of 100.078 billion yuan, a year-on-year increase of 8.6%, and the growth rate continued to lead the industry; the profit attributable to shareholders of the company reached 6.441 billion yuan, a year-on-year increase of 10.6%.

In the first quarter, China Telecom's mobile service revenue was 48.417 billion yuan, up 8.1% from the same period last year; fixed-line service revenue was 51.661 billion yuan, up 9.1% year-on-year. The company has expanded the mobile user market, and 5G services have continued to penetrate rapidly. The number of 5G package users has reached about 111 million, with a penetration rate of 31.2%, continuing to rank first in the industry. Wired broadband access revenue reached 18.915 billion yuan, up 9.8% year-on-year; broadband access ARPU was 39.4 yuan, up 4.8% year-on-year; smart home revenue maintained rapid growth, and value contribution continued to increase. Broadband comprehensive ARPU reached 46.3 yuan, up 6.9% year-on-year. At the same time, China Telecom strengthened the information expansion capabilities and operational vitality of the government and enterprise markets, and the digitalization revenue of the industry accelerated, reaching 23.872 billion yuan, up 13.4% year-on-year, and the revenue scale and market share remained industry-leading.

China Telecom said that while revenue continued to grow, thanks to good cost control, the company's profits achieved double-digit growth, with the profit growth rate exceeding the growth rate of service revenue.

China Unicom, which is always regarded as the "tail" of the chain, has exceeded market expectations many times in the past two years. Data shows that China Unicom's performance in the first quarter exceeded expectations, with operating income of 82.272 billion yuan, a year-on-year increase of 11.4%, of which the main business income increased by 8.2% year-on-year, a significant increase of 3.9 percentage points from the full-year growth of 4.3% in 2020, and 1.7 percentage points ahead of the industry growth rate of 6.5% in the first quarter; net profit attributable to shareholders was 1.691 billion yuan, a year-on-year increase of 21.2%, and net profit attributable to shareholders after deducting non-recurring items was 2.160 billion yuan, a year-on-year increase of 32.1%.

China Unicom is a benchmark for mixed-ownership reform, and its innovative business has maintained rapid growth, with its share continuing to increase: revenue in the first quarter of 2021 was 14.408 billion yuan, up 25.9% year-on-year, accounting for 19.5% of its main revenue, and continued to contribute strong growth momentum. At the same time, the revenue of broadband business has grown steadily: revenue in the first quarter of 2021 increased by 1.1% year-on-year, and the net increase of fixed-line broadband users was 2.03 million.

In terms of 5G business, China Unicom has made great progress. In the first quarter, its 5G package users increased by 21.02 million to 91.85 million, effectively driving the ARPU of mobile bill users to increase by 11.5% year-on-year to RMB 44.6. Mobile service revenue was RMB 41.071 billion, up 8.8% from the same period last year.

Operational data: 5G users surge, main business recovers

The impressive performance in the first quarter financial report is inseparable from the strong support of various main businesses. Compared with the data of the previous two months, the operating data of the three major operators in March showed a significant recovery.

Main operating data of the three major operators in the first quarter of 2021

Among them, the growth of 5G users, which is mainly driven by the three major operators, is the strongest. In March, China Mobile's 5G package customers increased by 15.593 million, reaching a total of 188.761 million. China Telecom's 5G package users increased by 7.86 million, with a total of 111.23 million 5G package users and a 5G package user penetration rate of 31.2%. China Unicom's 5G package users have reached 91.852 million, with a net increase of 7.309 million 5G package users this month and a total net increase of 21.022 million 5G package users this year.

In terms of mobile data, all three operators have seen substantial growth, with China Mobile seeing the largest increase. From -3.69 million in February to 2.425 million in March; China Telecom still maintains a high profile, with the largest net increase among the three; China Unicom's number of mobile users ranked second in March. Specifically, in March, China Mobile's mobile customer base increased by 2.425 million, with a total of 939.594 million users. In the same month, China Telecom's mobile user base increased by 3.45 million, with a total of 356.25 million mobile users. For China Unicom, in March, the total number of mobile billing users reached 309.293 million, with a net increase of 2.957 million mobile billing users this month and a total net increase of 3.482 million mobile billing users this year.

In recent years, due to market saturation, it is difficult for my country's mobile users to see large-scale growth. At the press conference on the development of industry and information technology in the first quarter, Zhao Zhiguo, spokesman of the Ministry of Industry and Information Technology and director of the Information and Communications Administration, introduced that the total number of mobile phone users in my country has remained basically stable. As of the end of February this year, the total number of mobile phone users nationwide was about 1.592 billion, a slight decrease from the historical highest level of 1.601 billion in October last year. Preliminary analysis shows that this is mainly due to the small incremental space, the conversion of dual-SIM users to single SIM, and the smooth progress of number portability.

According to him, currently 26 million users in my country have achieved number portability, which has reduced the demand for dual SIM cards across operators for many users and cancelled the number in the second card slot.

In terms of 4G users, China Unicom chose to cancel the disclosure of 4G users in February this year, and China Telecom has long stopped publishing 4G data, so in this dimension, only China Mobile's data is visible. The report shows that China Mobile's 4G customer base increased by 7 million, reaching a total of 788.33 million. Compared with the other two months in the first quarter, there is a large room for growth.

In the fixed-line business, the market has already been determined. Needless to say, China Mobile is still the operator with the largest number of users in March or the first quarter, and the largest number of users. In comparison, the data of China Telecom and China Unicom are also very impressive. In March, China Mobile's wired broadband customers increased by 2.719 million, reaching a total of 218.419 million. China Telecom's wired broadband users increased by 1.12 million, and the total number of wired broadband users reached 161.55 million. China Unicom's fixed-line broadband users have reached 88.127 million, and the fixed-line broadband users increased by 964,000 this month.