Profile of China's telecom industry in August 2015

The following is a profile of China's telecom industry in August 2015:

-- Overview

China's three basic telecom operators generated main operating revenues totaling 773.34 billion yuan in the first eight months of 2015, growing 2.3 percent year on year from the comparable figure for the year-earlier period.

The growth rate was 0.3 percentage points higher than that for the first seven months of 2015. It was calculated considering the influence of value added tax reform, according to the Ministry of Industry and Information Technology (MIIT).

The three companies, China Mobile (CHL.NYSE; 00941.HK), China Telecom (CHA.NYSE; 00728.HK) and China Unicom (CHU.NYSE; 00762.HK; 600050.SH), completed telecom business volume totaling 1,452.93 billion yuan in the period, up 24.6 percent year on year.

In August, the three telecom giants registered 198.13 billion yuan of telecom business volume, up 29.7 percent year on year. The growth rate went up 15 percentage points year on year. Their main operating revenues totaled 104.5 billion yuan, growing 4.6 percent year on year.

The following chart (Chart 1) shows the industry's main operating revenue in 2011-2015.

-- Subscribers

The sector registered about 1.3 billion mobile phone users in total by end-August, and the number of fixed phone users fell to 238.86 million.

The fixed phone users fell in number by 1.23 million in August.

The following Chart 2 shows detailed figures in 2011-2015

The number of mobile phone users increased 1.56 million in August 2015, while the number of mobile Internet users increased 8.36 million to 945.78 million in total. In the first eight months, the number of mobile phone users increased 10.06 million, while the number of mobile Internet users increased 70.56 million.

The number of mobile broadband users, including 3G users and 4G users, totaled about 713 million at the end of August, increasing 130 million in the first eight months of 2015. The penetration rate in all mobile phone users was 55 percent.

In a breakdown, the 3G service subscribers decreased 7.83 million in August and 49 million in the first eight months, to 436.25 million, and the 4G service subscriber number added 26.72 million in August and 179.96 million in the first eight months to 277.24 million in total.

The following Chart 3 shows detailed figures in 2011-2015.

The broadband business in China continued rapid development. The number of fixed-line Internet broadband access users increased 1.05 million in August to about 209.16 million. In a breakdown, the number of xDSL users decreased 3.76 million to 65.89 million; while the number of fiber-to-the-home/office users increased 3.97 million to 97.97 million.

The number of broadband users with Internet access speed higher than 8M accounted for 58.4 percent of the total, to over 122 million. The number of above-20M Internet users accounted for 23.1 percent of the total, up 12.7 percentage points from the end of 2014.

The following Chart 4 shows the number of new fixed-line Internet broadband users in 2012-2015

The following Chart 5 shows the number of new mobile Internet users in 2013-2015.

-- Business Structure

Among the industry's total operating revenue in Jan.-Aug. 2015, 575.65 billion yuan or 74.4 percent was from mobile telecom business, rising 1.8 percent year on year from the comparable figure for the year-earlier period. The percentage rate was 0.5 percentage points lower that for the same period of 2014.

In a breakdown, mobile data and Internet business reaped 211.1 billion yuan, rising 39.4 percent year on year from the comparable figure for the year-earlier period and accounting for 27.3 percent of the industry's total revenue.

Meanwhile, 197.69 billion yuan was from fixed-line telecom business, rising 4.1 percent from the comparable figure for the year-earlier period. In a breakdown, revenue from fixed-line data and Internet business reached 102.43 billion yuan, rising 4.1 percent year on year from the comparable figure for the first eight months of 2014. The growth rate was 0.5 percentage points lower that for Jan.-Jul. 2015.

Revenue from voice business only accounted for 32.3 percent of the industry's total revenue in the eight months, down 10.4 percentage points year on year, due to plummeting revenue from mobile voice business. The industry's revenues from local mobile calls, long-distance mobile calls and mobile roaming calls declined over 13.5 percent respectively from the comparable figure for the same period of 2014.

The following Chart 6 shows the structure of China's telecom main operating revenues in 2014-2015.

The following Table 1 compares the traffic volume of voice business and non-voice business in August 2015.

-- Regional development

Telecom operating revenues in east, central and west China went up 2.1 percent, 3.3 percent and five percent, respectively in Jan.-Aug. 2015. The growth rates were 1.7 percentage points, two percentage points and 1.1 percentage points lower than in the same period of 2014, respectively.

The following Chart 7 compares the proportions of revenue in total by region in August 2014-2015.

In the first eight months, the number of mobile broadband users increased 68.65 million, 32.57 million and 29.74 million in east China, central China and west China, respectively. The penetration of 3G and 4G services were 56.3 percent, 53.6 percent and 53.9 percent in the three areas.

Shanghai led the country by penetration of mobile broadband services, which was 62.5 percent. It was followed by Beijing and Jiangsu, with penetration of 61 percent and 60.9 percent, respectively. (Source: Ministry of Industry and Information Technology)