China’s telecommunications sector, historically a global leader in infrastructure expansion, is entering a phase of strategic recalibration.
After years of aggressive 5G network rollouts, state-owned telecom operators are now focusing on optimizing capital expenditures (Capex) and aligning investments with emerging technologies like artificial intelligence (AI) and cloud computing.
Investment Priorities: AI, Cloud, and 6G
AI and Cloud Computing: Operators are channeling resources into AI-driven solutions and cloud infrastructure to enhance service offerings and operational efficiency.
6G Research and Development: Aligned with China’s 14th Five-Year Plan, there is a concerted effort to invest in 6G technologies, positioning the nation at the forefront of next-generation connectivity.
Network Optimization: Focus is shifting towards enhancing existing networks to support digital transformation, rather than extensive new infrastructure builds.
Capital Expenditure Trends
China Mobile
2024 Capex: RMB 164 billion, accounting for 18.4 percent of telecommunications services revenue.
2025 Outlook: Planned reduction in Capex by 8 percent, focusing on efficiency and digital transformation.
China Telecom
2024 Capex: RMB 93.51 billion, a 5 percent decrease from the previous year.
2025 Forecast: Further reduction to RMB 83.6 billion, aligning with pre-5G investment levels.
China Unicom
2024 Capex: RMB 61.37 billion, a 17 percent year-on-year decrease.
Investment Shift: Increased focus on computing power and digital infrastructure.
5G Network Expansion and Subscriber Growth
China Mobile
5G Subscribers: 552 million by the end of 2024, with a net increase of 88 million.
Subscriber Base: Total mobile subscribers surpassed 1 billion.
2025 Plans: Addition of 340,000 new 5G base stations, despite overall Capex reduction.
China Telecom
5G Subscribers: Approximately 425 million, accounting for 59 percent of its mobile subscriber base.
Revenue Growth: Mobile service revenue rose by 3.5 percent to RMB 202.5 billion.
China Unicom
5G Subscribers: 213.5 million by mid-2025, with a net addition of 9.7 million in Q2.
Total Connections: Over 1.2 billion, including mobile, broadband, and IoT.
IoT Growth: IoT connections reached 685.1 million.
Strategic Shift: From 5G to Digital Infrastructure
As the initial 5G deployment phase concludes, these operators are redirecting investments towards digital infrastructure:
China Mobile: Emphasizing AI, cloud computing, and digital services to diversify revenue streams.
China Telecom: Focusing on cloud-network integration, AI, and quantum security to enhance service offerings.
China Unicom: Investing in computing power and digital smart applications to support digital transformation.
Conclusion
China’s telecom giants are transitioning from expansive 5G infrastructure development to a more balanced approach that includes digital innovation and service diversification. While Capex reductions are evident, the commitment to 5G expansion and digital transformation remains strong, positioning these companies for sustained growth in the evolving digital landscape.
Baburajan Kizhakedath
