Virus impact over each market - telecom operators, government agencies and regulators' responses - revised forecasts for the next 5 years.
Last updated: 15 Jul 2020 Update History
Report Pages: 130
Analyst: Sebastien De Rosbo
The Chinese telecom market is the largest in the world in terms of subscribers. Market development has generally been driven by investments from government-allied entities and features a strongly guided industrial policy.
The continuing sector growth and transition from infrastructure and service provision to application creation and user demand stimulation has also driven the fast-developing data centre market.
The fixed-line sector continues to decline in the wake of subscriber migration to mobile platforms for voice and data services. This trend is expected to continue during the next five years, with an associated growth in the number of mobile broadband subscribers.
The government is aiming to provide universal and affordable broadband coverage through market competition and private investment in state-controlled enterprises such as Broadband China and Internet Plus. As a result, fixed broadband penetration has grown steadily in recent years. The focus on fibre has meant that the number of fibre-based connections has grown particularly strongly, with the DSL and cable segments declining as subscribers migrate to fibre infrastructure.
The mobile market has recently been characterised by lower subscriber growth, though this is in line with higher penetration. Profit among the MNOs has also been affected, as competition has encouraged them to provide very cheap plans, both for LTE and now for 5G services. Given the requirements for continued investment in network expansion and upgrades, this pricing competition is unsustainable in the medium term.
By early 2020 the number of mobile subscribers had broached 1.6 billion however, growth is expected to be relatively slower due to a saturated and mature market over the next five years. Market growth will be characterised by the cannibalisation of platforms, with 3G and LTE subscribers migrating to 5G in response to considerable efforts by the government and MNOs to promote 5G both for end-users and for various industrial sectors.
BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.
On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.
Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.
The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.
China Mobile; China Telecom; China Unicom, Alibaba, JD.com, Baidu, Tencent
As you know, I have resigned from the Labor Ministry and have decided not to re-contest the seat of Charlton at the next election – both for personal reasons.
Before leaving Parliament, I particularly wish to record my thanks to you for your generous and constructive participation in the deliberations that generated significant economic policy reforms for the Australian community. Continuous economic transformation is a key challenge that faces all Governments.
The development of sound public policy should always be contestable. Ultimately, good and equitable outcomes are not concessions to any particular interest group, but the careful balancing of interests to create the greatest possible benefit for the nation. You have contributed to that, and I sincerely thank you for it.
Greg Combet, Former Minister for Climate Change, Industry and Innovation
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