Telecom Providers: Telecoms help implement China’s digitization agenda
Lower pricing, higher spending squeeze profits
The telecom providers category declined 19 percent in value in the BrandZ™ China Top 100, following a 12 percent decline a year ago. Value dropped for all three telecom provider brands in the ranking: China Mobile, China Telecom, and China Unicom.
Government directives to cut data costs by 30 percent, while also accelerating broadband, including the 5G rollout, squeezed the profit performance of all three state-owned brands. As part of its plan to accelerate digitization, the government also directed the brands to eliminate roaming fees.
At the same time, consumers viewing entertainment or other interesting content on their smartphones typically accessed one of the Over-the-Top (OTT) carriers, many of which are operated by China’s leading internet platforms, including Baidu, Alibaba, and Tencent.
These pressures compounded the impact of slower economic growth and intensified competition among the carriers as the market matures. Of the over 800 million people accessing the internet in China, around 98 percent are using mobile phones, according to the China Internet Network Information Center. China Mobile is the world’s largest telecom provider, with over 900 million subscribers.