Wednesday, 08 April 2020

China Mobile ramps up 5G targets, unaffected by COVID-19

by Harry Baldock, Total Telecom
Thursday 19 March 20

“We are maintaining our annual 5G targets,” said the company chairman, Yang Jie

China Mobile will be pumping around 100 billion yuan (around $14 billion) into rolling out 5G this year, despite the set backs presented by the coronavirus pandemic. This investment represents over half of the company’s planned ~180 billion yuan (~$26 billion) expenditure for the year, a huge increase on the 14% earmarked for 5G last year…

China Mobile will be pumping around 100 billion yuan (around $14 billion) into rolling out 5G this year, despite the set backs presented by the coronavirus pandemic.

This investment represents over half of the company’s planned ~180 billion yuan (~$26 billion) expenditure for the year, a huge increase on the 14% earmarked for 5G last year.
 
It will be used to build around 250,000 5G base stations, quintupling the number it built for its initial launch in 50 cities last year.
 
The news comes as China’s largest operator reveals its annual figures, which were somewhat disappointing, with average revenue per user (ARPU) declining and net income down 9.5% to 106.8 billion yuan (~$15 billion).
 
In part, this decline is due to the coronavirus, the outbreak of which resulting in Beijing ordering China Mobile to reduce data costs and boost network speeds. However, China Mobile chairman, Yang Jie, expects the proliferation this year of 5G to recoup these losses, with the company recording 15.4 million 5G customers just three months after its initial launch.
 
The coronavirus pandemic has also directly affected the company’s 5G rollout, leaving the company somewhat behind their initial target, but Yang noted that the company has increased capex by 8.4% this year, partly in an effort to make up for lost time when it comes to 5G.
 
"We can work overtime in the second half of the year and implement various measures to gain back time lost because of the outbreak," Yang said. "We are maintaining our annual 5G targets."
 
Despite China reporting that the outbreak has been – to use the words of China's World Health Organization representative Dr Gauden Galea – “nipped in the bud”,  it is unclear how long Chinese operators will be delayed in moving forward with their 5G deployments. That said, since dominance in 5G tech has become such a mainstay of Chinese political rhetoric in the face of the ongoing trade war with the US, it seems doubtful that the government will restrict them for long.
 
China Mobile will hoping to race ahead with 5G sooner rather than later.
 

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