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2018 China - Telecoms, Mobile and Broadband - Statistics and Analyses

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Last updated: 27 Aug 2018 Update History

Report Status: Archived

Report Pages: 192

Analyst: Phil Harpur

Publication Overview

This report provides a comprehensive overview of trends and developments in China’s telecommunications market. The report analyses the telecoms Infrastructure, mobile, fixed broadband, digital media and digital economy sectors. Subjects include:

  • Market and industry analyses, trends and developments;
  • Regional market comparisons
  • Telecoms Maturity Index
  • Industry and regulatory issues;
  • Infrastructure;
  • Major players, revenues, subscribers, ARPU;
  • Mobile voice and data markets;
  • Broadband (FTTH, DSL);
  • Internet of Things, 5G developments
  • Mobile, broadband and mobile broadband forecasts to 2023.

Researcher:- Phil Harpur
Current publication date:- August 2018 (24th Edition)

Executive Summary

China to lead the world in 5G investments

As the Chinese market approaches saturation, there has been a shift of emphasis in China's broadband policy from infrastructure build-up and service provision to application creation and user demand stimulation.

China’s fixed-line market is in decline due to voice to mobile substitution. Fixed line penetration has dropped significantly over the past five years. This trend is predicted to continue over the next five years to 2023 driven by the growing adoption of mobile broadband.

In early 2018 the Chinese government updated its list of ‘sensitive sectors’ for outbound investment, removing telecoms operations from the list.

China is projected to lead spending on Internet of Things technologies in the Asia Pacific, driven by the agriculture and healthcare sectors. China’s government is aiming for universal and affordable broadband coverage through investment and competition as specified in policies.

Fixed broadband penetration in China has grown strongly over the past five years. Fibre broadband continues to be the fastest growing fixed broadband segment, as DSL and cable modem access will continue to decline as customers migrate away from these platforms in favour of fibre broadband. There was very strong growth in fibre connections from 2012 to 2017.

Within China one of the largest drivers of economic growth is its increasing urbanisation rate as rural residents move to cities in search of economic opportunities. Urban residents earn three times the income of rural residents in China.

Moderate growth is predicted over the next five years in the fixed broadband segment for the 2018 to 2023 time-period.

Much of the initial growth in China’s digital economy was underpinned by the online demand for information, media and commerce, giving rise to China’s three domestic digital economy giants; Baidu (search), Alibaba (e-commerce) and Tencent (social media). Also evolving within China’s digital economy to meet the needs of China’s online audience are the banking and financial services industry, public administration services, health services and education services. China has the world’s largest e-commerce market and online retail sales are forecasted to grow strongly.

Although China boasts the largest mobile market in the world, there is still much room for growth given the focus on large scale mobile broadband investment.

Mobile subscriber growth is expected to be slower due to a saturated and mature market over the next five years to 2023. Operators will continue to focus on increasing ARPU in light of diminishing opportunities to acquire new subscribers and the need for operators to maximise monetization of 4G and 5G investments.

In the short term the need to adequately serve subscribers based on handset type influences the allocation of limited radio frequency resources between the three technology platforms. In the medium to long term the need to maximise revenue is driving strategies encouraging subscribers to migrate to higher paying 4G and 5G products based on mobile broadband.

Mobile broadband has seen very strong growth in China over the past five years. Proliferation of LTE and improving affordability of smartphones is driving growth both in mobile broadband subscribers as well as the amount of traffic used per subscriber. This strong growth is expected to continue over the next five years to 2023 but at an increasing slower growth rate due to a fast maturing market. The mobile broadband market will be driven by increasingly faster speeds offered by the mobile operators as they roll out their 4G and 5G networks and improving tariffs due to strong competition.

China has emerged as one of the most aggressive countries promoting 5G and is projected to become the world’s largest 5G market by 2025, as networks are rolled out in urban areas and handset vendors integrate 5G chipsets into mobile devices. China is predicted to account for more than two-thirds of all 5G connections by 2025. The Chinese government is a major driving force behind the country’s adoption of IoT with plans such as the “Made in China 2025” strategy. Government backing of 5G, artificial intelligence and data analytics is driving the rapid development of IoT in Greater China and the region is predicted to dominate “industrial IoT.”

Key Developments

  • China's government strengthens IOT policies to boost economic growth.
  • China is projected to lead spending on Internet of Things technologies in the Asia Pacific
  • Fixed broadband penetration in China has grown strongly over the past five years.
  • Fibre has overtaken DSL to be the key fixed broadband technology platform.
  • China's massive online population allows a number of social media platforms to flourish.
  • China is projected to become the world's largest 5G market by 2025.
  • China is predicted to account for more than two-thirds of all 5G connections by 2025.
  • Mobile broadband has seen very strong growth in China over the past five years.

Key companies mentioned in this report:

China Mobile; China Telecom; China Unicom, Alibaba, JD.com, Baidu, Tencent, SINA, Weibo, Sohu, Xiaomi, Meilishuo, Mogujie, RenRen, Youku, Iqiyi/Qiyi, V.QQ.com, BesTV, Apple

Phil Harpur
August 2018

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