2021 is the opening year of the "14th Five-Year Plan", the country has entered a new stage of development, telecom operators in the active participation in economic and social digital transformation at the same time, increase investment in 5G, computing networks, scientific and technological innovation, to promote their own digital transformation.
Recently, the three major operators have announced their 2021 financial reports, the revenue growth rate of the three companies has hit a new high in recent years, and the revenue of China Mobile and China Telecom has achieved double-digit growth; the scale of profits has steadily increased, and profitability has remained stable and progressive. Facing the new "blue ocean" of digital economy development, operators actively explore the road of enterprise innovation and transformation and development, China Mobile anchors the new positioning of "world-class scientific and technological innovation company" and accelerates the promotion of "digital and intelligent transformation"; China Telecom continues to deepen the "cloud to digital transformation" strategy to promote the high-quality development of enterprises; China Unicom actively promotes the company's development quality around the new track, new strategy and new positioning, and explores the innovation and transformation road of telecom operators in the digital economy era.
Overall performance remained excellent
Revenue-generating capacity reached new heights
Since 2021, with the in-depth promotion of the industry's digital transformation, the value of the industry has gradually returned, and the revenue of operators has maintained rapid growth. From the specific value point of view, China Mobile's operating revenue reached 848.3 billion yuan, an increase of 10.1% year-on-year, a new high in nearly 10 years; communication service revenue was 751.4 billion yuan, an increase of 8% year-on-year, and the growth rate returned to the first place in the industry. China Telecom's operating revenue reached 439.6 billion yuan, an increase of 11.7% year-on-year, and communication services revenue reached 402.8 billion yuan, an increase of 7.8% year-on-year, continuing to maintain a steady growth trend. China Unicom's operating revenue reached 327.9 billion yuan, an increase of 7.9% year-on-year; communication services revenue was 296.2 billion yuan, an increase of 7.4% year-on-year, although the growth rate was slightly lower than that of the other two, but still maintained a high level. From the perspective of revenue growth sources, the growth of the three revenues is the result of the "stabilization and recovery" of traditional businesses and the "rapid growth" of transformation business, the stable traditional business has become the ballast stone of transformation and development, and the rapid growth of transformation business has become a new engine for transformation and development. The revenue pairs of the three major operators from 2017 to 2021 are shown in Figure 1.
Figure 1 Comparison of revenue and growth rate of the three major operators from 2017 to 2021
Profitability has increased steadily
In 2021, the EBITDA scale of the three major operators reached a new high, With China Mobile increasing by the largest by 9.1%, China Telecom and China Unicom increasing by 4.2% and 2.5% respectively; China Telecom and China Unicom's EBITDA rate decreased slightly, and China Mobile maintained a slight increase, still having the highest gross profit level in the industry, with an EBITDA rate of 41.4%. In terms of net profit, the net profit scale of the three major operators have achieved rapid growth, China Telecom and China Unicom have achieved double-digit growth, China Mobile has also achieved a growth of 7.7%, although it has not reached the highest level in history, but gradually entered the rising channel; from the perspective of net profit margin, China Mobile has declined slightly, but continues to maintain the industry leadership, China Telecom and China Unicom with the improvement of financial conditions, the level of net profit margin has further improved, but there is still a gap with China Mobile. The comparison of EBITDA and net profit of the three major operators from 2017 to 2021 is shown in Figure 2.
Figure 2 EBITDA and net profit comparison of the three major operators from 2017 to 2021
Operational performance continued to be robust
The scale of connection is expanded by people and things to expand new spaces
Since the beginning of the "14th Five-Year Plan", with the gradual fading of the demographic dividend, individual market connectivity has entered the era of stock competition, the family market continues to grow but has limited space, and the Internet of Things and government-enterprise access of the government-enterprise market for thousands of industries have become a new direction for future connectivity growth. From the perspective of the connection scale of the three major operators, by the end of 2021, the scale of China Mobile's connections will exceed 2.2 billion, China Telecom's reached 840 million, and China Unicom's will be 720 million (as shown in Figure 3).
Figure 3 Comparison of the connection scale of the three major operators
Individual market: the volume and value doubled, and 5G drove the return of value
In 2021, the three major operators gradually out of the negative impact of the epidemic, the user scale returned to the pre-epidemic level, China Telecom grew the most, with more than 20 million new users, but in the context of the near saturation of the entire industry user space, the future user growth will mainly be the "zero-sum game" state of existing user competition, and the future personal connection will tend to be stable. From the perspective of 5G users, as the three major operators continue to accelerate user migration and the rapid growth of 5G package users, China Mobile still maintains the leading position in the scale of 5G users, but the share is lower than the overall user share (as shown in Figure 4).
Figure 4 Comparison of the scale of users of the whole network and 5G package users of the three major operators in recent years
From the perspective of the change of mobile ARPU value, the ARPU values of the three major operators have achieved different degrees of growth, mainly due to the pull of 5G user migration on user value, and also reflect the role of 5G in enhancing the value of the industry (as shown in Figure 5).
Figure 5 Comparison of ARPU changes of mobile users of the three major operators from 2017 to 2021
Household market: The scale continues to grow, and the value of ARPU has steadily increased
The three major operators have achieved sustained growth in the scale of home broadband users in 2021, with China Mobile reaching 218 million households, China Telecom reaching 170 million households, and China Unicom reaching 0.95 billion households. China Mobile still maintains a rapid development momentum in the home market, the position of home broadband customer share continues to be stable, and the proportion of China Telecom Gigabit broadband users has reached 7%. With the continuous improvement of the HDICT ecosystem, the home broadband integrated ARPU of the three major operators has steadily increased, and the home broadband integrated ARPU of China Mobile has increased to 39.8 yuan, an increase of 5.6% year-on-year; the comprehensive ARPU of China Telecom Broadband has increased to 45.9 yuan, an increase of 3.4% over the second half of 2020, and the contribution of smart home value has increased significantly; China Unicom's broadband access ARPU has decreased slightly, but the income of smart homes has increased steadily. The comparison of home wide users and ARPU of the three major operators in 2021 is shown in Figure 6.
Figure 6 Home broadband subscribers and ARPU development of the three major operators from 2017 to 2021
Government and enterprise market: scale drives growth, creating a new connected growth pole
The three major operators continue to expand new space in the government and enterprise market, and the scale of Internet of Things users has steadily increased, becoming an important channel for the growth of the company's connection scale. By the end of 2021, the scale of IoT connections of the three major operators has exceeded the sum of personal connections, and the scale of China Mobile's IoT connections continues to lead, with a total scale of nearly 1.05 billion (as shown in Figure 7).
Figure 7 The development of IoT users and revenue of the three major operators from 2017 to 2021
Facing thousands of industries, the three major operators actively create benchmarks to participate in the digital and intelligent transformation of economy and society, driving the further growth of connection scale. The scale of China Mobile's government and enterprise customers exceeded 18.83 million, 200 leading demonstration projects, signed more than 2,800 high-quality "commercial housing", launched the first 5G private network, expanded 1590 private network projects, and entered the scale replication stage in multiple industries; the number of customers in China's telecommunications industry exceeded 10 million, and about 200 benchmarking projects in key vertical industries were created, widely replicating 5Gto B scenarios; China Unicom's industrial Internet innovation business grew rapidly, becoming the "first engine" to promote the growth of Unicom's revenue.
The hash rate basis is continuously improved from the table and the inside
With the advancement of the national "East Counting West" project, 8 national hub nodes of computing power networks and 10 national data center clusters in Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area, Chengdu-Chongqing, Inner Mongolia, Guizhou, Gansu and Ningxia began planning and construction. The three major operators actively responded to the policy call to integrate into the overall situation of national development and accelerated the layout in the field of computing power networks, with the scale of China Mobile racks exceeding 410,000 and cloud servers exceeding 660,000; the scale of China Telecom racks exceeded 470,000, and the scale of computing power reached 2.1EFLOPS; and the scale of China Unicom racks exceeded 300,000.
According to the annual report data released in 2021, China Telecom IDC's revenue exceeded 31.6 billion yuan, and China Mobile reached 21.6 billion yuan, and the revenue around computing infrastructure has grown rapidly. From the perspective of cloud revenue, with the continuous enrichment of the number of cloud products of the three companies, China Telecom's Tianyi Cloud revenue reached 27.9 billion yuan, an increase of 102%, in a leading position in the telecommunications industry; China Mobile's mobile cloud revenue reached 24.2 billion yuan, of which the industry cloud was 19.2 billion yuan, the growth rate led the industry; China Unicom Cloud revenue reached 16.3 billion yuan. The comparison of IDC and cloud revenue of the three major operators is shown in Figure 8.
Figure 8 Comparison of IDC and cloud computing revenue of the three major operators in recent years
Scientific and technological innovation is accelerating the layout from the outside in
Since the beginning of the "14th Five-Year Plan", with the proposal of the national science and technology innovation self-reliance and self-improvement policy, the three major operators have paid more and more attention to the role of internal scientific and technological innovation, and have continuously increased their investment and layout in scientific and technological innovation, China Mobile has put forward the new positioning of "creating a world-class information service technology company", and continued to improve the "one-in-four rings" scientific and technological innovation system, with nearly 14,000 R&D personnel; China Telecom actively improved the "R-D-O" scientific and technological innovation layout to create the core competitiveness of future development. Strengthen the core technology research and the application and promotion of achievements; China Unicom strengthened the integrated development of resource integration and capability penetration, with the proportion of scientific and technological innovation personnel reaching 22%, and the number of patent authorizations increasing by 120%. According to the data released in the 2021 annual report, China Mobile's annual R&D investment exceeded 18.6 billion yuan, accounting for 2.2% of operating revenue; China Telecom's R&D expenses increased by 52.6% to 3.4 billion yuan; and China Unicom's R&D expenses increased by 61.7%.
Set sail for a new blue ocean of digital economy
Consolidate the foundation of the Internet of Everything
Connectivity is the fundamental transformation and development of operators, and the growth momentum of connection scale has switched from the individual market to the government and enterprise market, and the realization of "superhuman". The scale of personal connection provides a solid foundation for the transformation and development of enterprises and becomes the ballast stone of transformation and development; facing the government and enterprise market of thousands of industries, how to connect "things" in a broader sense is becoming a new development direction. As connectivity shifts from scale development to value management, the breadth and depth of connectivity are further deepening, and the value and connotation of connectivity are further broadened. Facing the "new blue ocean" of the vast digital economy in the future, operators can only consolidate the basic momentum of enterprise transformation and development by consolidating the foundation of the Internet of Everything and planting the foundation of connection scale.
Build a solid computing power network base
If connection is the foundation of transformation and development, then computing power is the base of enterprise transformation and development. With the continuous advancement of the national "East Number West Computing" project, operators actively integrate into the overall situation of national development, build a computing network architecture to support the development of the digital economy, and help the transformation and upgrading of economic and social digital intelligence. With the continuous improvement of the computing network system and the continuous improvement of the scale of computing power, the computing power business model urgently needs to change from the provision of basic computing power services such as IDC and cloud to a richer category of computing power intelligent services. Facing the digital and intelligent transformation of the economy and society, operators can only inject new momentum into the transformation and development of enterprises by continuously improving the computing power network and making a thick computing power base.
Stimulate the momentum of scientific and technological innovation
In addition to the traditional labor and capital, the role of scientific and technological innovation and data elements is increasing, unlike the declining marginal contribution of traditional labor and capital elements, the marginal contribution of scientific and technological innovation and data elements will show new characteristics, innovation is becoming an important driving force for the transformation and development of the company, and continue to promote the development of operators towards the connotative transformation path. The foundation of scientific and technological innovation is human innovation, and all development is human development. Facing the development of digital transformation, we must pay attention to the digital transformation of the network, but also pay attention to the digital transformation of people, scientific and technological innovation, capital operation and the role of data elements, in the final analysis, people must play a good organizational role in it, build a good mechanism to fully stimulate the vitality of talents, which can provide a steady stream of original kinetic energy for the transformation and development of enterprises.
During the "14th Five-Year Plan" period, as the digital economy continues to become stronger, better and bigger, telecom operators have entered a new stage of development, and only by continuing to consolidate the foundation of the Internet of Everything and creating a "connecting flywheel" to inject basic kinetic energy into transformation and development; building a computing power network base, creating a "computing flywheel" to provide new kinetic energy for transformation and development; stimulating scientific and technological innovation momentum, and creating a "technology flywheel" to provide original kinetic energy for transformation and development. Only by forming a closed-loop kinetic energy system that promotes each other can we help the transformation of enterprises to sail to a broader digital economy "new blue ocean".
End
Author: China Mobile Communications Group Design Institute Co., Ltd
Chongqing Branch Sun Jiayu
Editor-in-Charge/Layout: Fan Fan
Review: Shen Qing
Producer: Liu Qicheng
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