China Mo­bile is all in for 5G de­ploy­ment: com­pany ex­ec­u­tive

Global Times US Edition - - BIZUPDATE -

With the fad­ing of China’s de­mo­graphic div­i­dend, the tele­com sec­tor should shift to value-based op­er­a­tions in­stead of re­ly­ing on an ex­pand­ing cus­tomer base amid lethar­gic growth, in­dus­try in­sid­ers said.

Tele­com in­dus­try growth was stag­nant for the first five months of this year, and China Mo­bile’s rev­enue con­tracted, the com­pany’s Chair­man Yang Jie told MWC19 Shang­hai on Wed­nes­day, me­dia re­ports said.

In the first quar­ter of 2019, China Mo­bile re­ported rev­enue of 185 bil­lion yuan ($26.8 bil­lion), down 0.8 per­cent year-on-year, and net prof­its fell 8.3 per­cent, ac­cord­ing to the com­pany’s fi­nan­cial re­port.

“The tele­com in­dus­try needs to shift its busi­ness model from low mar­gins and quick turnover to a model fea­tur­ing high qual­ity and ef­fi­ciency, to over­come the growth dif­fi­cul­ties caused by China’s fad­ing de­mo­graphic div­i­dend,” Liu Xingliang, a tele­com ex­pert based in Bei­jing, told the Global Times on Thurs­day.

China is the world’s largest mo­bile mar­ket with a sub­scriber pen­e­tra­tion rate of more than 80 per­cent, which means that the scope for fu­ture sub­scriber growth is quite lim­ited, said a re­port re­leased by GMSA.

“With mil­lions of tech-savvy con­sumers in China who are as­tute so­cial me­dia adopters and users of var­i­ous ap­pli­ca­tions, there’s an in­creas­ing de­mand on op­er­a­tors for im­proved net­work per­for­mance,” said Liu.

China Mo­bile is on the way to a busi­ness model tran­si­tion as it tar­geted build­ing 50,000 5G base sta­tions na­tion­wide by the end of 2019, Yang said dur­ing the MWC Shang­hai.

China Mo­bile will up­grade its ex­ist­ing 4G base sta­tions to 5G, which will cost less than build­ing new sta­tions. But it’s still an ex­pen­sive pro­ject, and it will mean lower prof­its or even losses in the near fu­ture, Liu added.

“Busi­ness transition­s take time, but you have to take steps for growth in the long run,” said Liu.

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