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Telecom Providers

Telecom Providers

Investment increases

in 5G infrastructure

COVID-19 intensifies category challenges

The COVID-19 pandemic reduced telecom provider brand revenues as customers with multiple SIM

cards dropped some services and fewer customers added services. Home quarantining increased demand for broadband streaming, but not enough to offset the impact on profits.

During the first quarter, profits declined for the three government-owned telecom providers in the BrandZ™ China Top 100—China Mobile, China Telecom, and China Unicom, which experienced the steepest decline. The value of the telecom providers category declined 13 percent.

COVID-19 added an additional challenge for brands already feeling squeezed by government directives to simultaneously improve service and speed while easing prices for consumers. Free phone service from Over-the-Top providers, such as WeChat, also added pressure.

As China’s economy continues to recover, the use of digital and online services, accelerated during the lockdown, could drive business increases for the three telecom providers. Each brand planned to invest heavily in 5G infrastructure during 2020, with China Unicom and China Telecom collaborating on developing a shared network to reduce capital expenditure.

In part to stimulate competition among the three telecom providers, the Chinese government introduced mobile number portability, which permits consumers to keep their telephone number when they switch providers.

Ease of switching may help China Telecom and China Unicom, which are much smaller than China Mobile and usually less expensive. China Mobile is the world’s largest telecom provider with around 950 million customers. Both China Unicom and China Telecom are around one-third the size.