Telecom firms post growth in earnings

The total revenue of the country’s three telecommunication operators amounted to 1.4 trillion yuan ($223 billion) last year, with net profit reaching 133.3 billion yuan owning to strong demand for faster wireless data services.

China Telecom Corp Ltd said on Wednesday its net profit was 18.6 billion yuan in 2017, a 3.3 percent rise compared with the previous year. Its revenue rose 3.9 percent to 366.2 billion yuan, with 4G mobile subscriber numbers growing to 182 million.

China Mobile Communications Corp, the world’s largest mobile carrier by subscribers, last week reported its net profit was 114.3 billion yuan compared with 108.7 billion yuan a year earlier, an increase of 5.1 percent, while its total operating revenue rose 4.5 percent to 740.5 billion yuan.

The company had a net addition of 114 million 4G customers, bringing the total number of 4G customers to 650 million, while the 4G penetration rate of its mobile customers reached 73 percent.

China United Network Communications Group Co Ltd saw its net profit jump 176.4 percent year-on-year to 430 million yuan in 2017, as the country’s mixed-ownership reform has enhanced its competitiveness and improved financial performance.

The country will scrap domestic data roaming charges from July 1, as it steps up efforts to offer more affordable telecom services, said Miao Wei, minister of industry and information technology in early March.

Rates for mobile internet services will be cut by at least 30 percent this year, accord- ing to the government report, emphasizing the country will significantly lower the rates of home broadband, corporate broadband and dedicated internet access services.

“The lowering of mobile data fees will bring about big pressure on the growth of revenue and profit,” said Shang Bing, chairman of China Mobile. Shang estimated the company’s mobile data costs will be lowered by more than 30 percent this year, and they will create more value and lower the price to attract more users.

Wang Xiaochu, chairman of China Unicom, said the move will encourage telecom carriers to innovate and reduce other costs. China Telecom will adjust mobile data packages and improve their products and services, according to its chairman Yang Jie.

Industry insiders admitted cutting mobile data fees will put pressure on telecom carriers as their earnings from mobile data services remain an important source of revenue and core business.

“China Unicom and China Telecom still lag behind their rival China Mobile in the field of 4G base stations, construction of telecom infrastructure and number of subscribers. What they should do is to increase investment and improve telecom service quality,” said Fu Liang, an independent telecom expert.

Fu said the telecom carriers should offer content and more value-added services to drive more data consumption from subscribers.