How have the three major operators been doing in the past nine months?

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With China Telecom announcing its operating data for September 2018 on October 29, the development of the three major operators in the first three quarters was fully announced:

• China Mobile: The number of mobile users reached 916.497 million, with a net increase of 3.52 million this month, of which 4G users reached 695.286 million, with a net increase of 5.531 million this month; the number of wired broadband users reached 146.819 million, with a net increase of 4.951 million this month, and a cumulative net increase of 34.132 million this year.
• China Telecom: The number of mobile users reached 294.03 million, with a net increase of 3.09 million this month, of which 4G users reached 230.45 million, with a net increase of 3.32 million this month; the number of wired broadband users reached 143.84 million, with a net increase of 1.14 million this month, and a cumulative net increase of 12.45 million this year.
• China Unicom: Mobile users reached 309.826 million, with a net increase of 2.61 million this month, of which 4G users reached 213.850 million, with a net increase of 3.005 million this month; wired broadband users reached 80.347 million, with a net increase of 729,000 this month and a cumulative net increase of 3.808 million this year.

China Mobile leads the three major operators in development and for the first time leads the operator listed companies (China Telecom still has 25 million broadband users belonging to non-listed companies) in the basic business indicators "Triple Crown". The following is an analysis from three dimensions:

1. Development of Mobile Users

Analysis: China Mobile's monthly net increase in mobile users was above 3 million in all months except April, when the number grew by 1.121 million. China Telecom's net increase in mobile users from January to August was above 5 million, with a slight decline in September. However, the gap in total mobile users between China Telecom and China Unicom narrowed from 37.075 million at the beginning of the year to 15.796 million, which shows its strong development momentum. China Unicom's net increase in mobile users was around 2 million per month except for March, when it hit a new high of 4.105 million. Its growth rate was the slowest among the three.

Trend: China Mobile has an absolute advantage in the number of mobile users. Its number of mobile users is greater than the sum of China Telecom and China Unicom. The gap between the number of mobile users of China Telecom and China Unicom is gradually narrowing. Given that the number of mobile users nationwide is in a transitional saturation period, it will not happen overnight for China Telecom to surpass China Unicom in terms of mobile users. However, it is not ruled out that it will continue to advance at a rapid pace as it did from January to August.

2. Development of 4G Users

Analysis: The popularity of 4G networks and the further mobility of Internet applications have determined that 4G users are the main source of income for operators. Under the condition of high saturation of mobile users, the sources of new 4G users are low-cost migration to other networks and the migration of existing 2G and 3G users. After experiencing negative growth in 4G users in April, China Mobile adjusted its 4G strategy in a timely manner and reversed the trend in May. In the following months, the net increase of 4G users remained at around 5 million. Considering that the number of new mobile users of China Mobile remained at around 3 million, at least two-fifths of its net increase in 4G users came from the migration of existing users. The net increase of 4G users of China Telecom and China Unicom also exceeded their respective net increase of mobile users, indicating that the three major operators attach great importance to the migration of existing mobile users. At present, the proportion of 4G users has exceeded 70% and is close to 80% (as shown in the figure below), the users who can be migrated have basically completed the migration, as long as a small number of elderly people, children and some remote areas where 4G network coverage is not in place. Increasing the proportion can only promote the replacement of elderly and children's mobile devices and increase 4G network coverage.

III. Development of Broadband Users

Analysis: In terms of broadband business development, China Mobile's monthly net increase has exceeded 2.5 times the sum of China Telecom and China Unicom's monthly net increases.

China Mobile, with its huge mobile network advantage of 60%, surpassed China Unicom in fixed-line broadband users in October 2016 and China Telecom in September 2018 through mobile converged broadband strategy, becoming the new broadband overlord of operators; China Telecom is also trying to converge broadband through low ARUP mobile users, but the overall discount is not as strong as China Mobile, and the blocking failed; China Unicom has always been a follower in broadband operations, so it is difficult to make achievements. According to this development trend, it is not impossible for China Mobile to fully surpass the broadband users of telecom groups (broadband users of listed companies + 25 million users of non-listed companies) in the second half of 2019.