通信業界レポート - 中国：2020 - 2025年
China Telecommunications Industry Report, 2020-2025
|通信業界レポート - 中国：2020 - 2025年|
発行: Idem Est Advisory & Research
ページ情報: 英文 65 Pages
The ‘China Telecommunications Industry Report, 2020-2025’ includes a comprehensive review of the Chinese market dynamics, market sizing, market forecasts, analysis, insights and key trends.
Globally, the telecommunications sector is proving to be a core and essential infrastructure service to national economies, with data infrastructure becoming critical in a connected world and will likely increasingly attract a new class of investors such as large infrastructure funds. Idem Est Research expects the Chinese telecommunications industry to remain steady thanks to the defensiveness nature of the industry, amid the political uncertainties and an uncertain economic outlook due to the COVID-19 pandemic.
Growing mobile phone penetration and high fixed broadband take-up among households will fuel future growth over the next five years.
According to our China Telecoms Report, Idem Est Research forecasts that mobile subscriptions and fixed broadband subscribers will continue to fuel the telecoms sector growth in the 2019-25 period. More than 160m people became Internet users over the last in six years and another 180m more Internet users are expected to come online over the next six years by 2025.
Following the market expansion over the last 5 years, Idem Est Research forecasts sustained revenue growth to 2025, despite the Covid-19 pandemic and the diminishing impact of declining legacy voice and SMS revenue.
The Chinese government is the largest shareholder in all three Telecommunications Service providers (TSPs), swaying a large influence on strategy, network investments and pricing to the operators and putting great emphasis on developing the country's telecommunications infrastructure as it is so tightly related to developing the national economy and strengthening national unification.
The strategic and economic competition between the US and China is at the centre of advanced technology competition and the future of global data and communications. Gaining strategic and economic power is depending heavily on having technological ascendancy, as one of the most salient feature of China's vision of its China Dream and "the rejuvenation of the Chinese nation".
Idem Est Research expects the overall telecoms market to continue its growth through to 2025 after a marked in mobile service revenue from 2018 and 2019 putting pressure on mobile ARPU.
The Capex from Chinese operators is cyclical with mobile rollout leading to investments in line with the operators' top-line growth. Capex investments peaked between 2015 and 2016 while all three operators built their respective 4G mobile network and is now declining to lower level in 2019 but will increase again from 2020 through to 2025, as mobile operators invest in 5G, bolster their 4G coverage and increase capacity to fulfil strong data demand. The Capex to GDP ratio spiked between 2015 and 2017 and its started to slide from 2017 onwards.
5G is the backbone of a wide range of technological advances including autonomous vehicles, smart cities and Internet of Things. To that effect, China is stepping up the long march to 5G with the government directing its 3 operators to accelerate 5G network constructions despite the COVID-19 pandemic restrictions.
Idem Est Research projects a significant increase in Capex spend throughout 2020 alone by installing more 5G base stations across all cities, ramping up China's 5G rollout nationwide and consolidating its 5G network leadership in terms of subscribers and availability in the country.
The Chinese three-player mobile market is a remarkably stable market with three established state-owned mobile and fixed operators competing under the direction of the Central Government providing directions for network speed upgrades, mobile data tariffs reduction and future investments policy on 5G and FTTH.
Most operators lost revenue and EBITDA share to China Mobile over the last six years and China Telecom started to recover in 2019, improving its EBITDA. China Unicom lost both revenue and EBITDA share while cost reduction measures started to flow in 2019 with improving EBITDA and cash flow.
Average annual mobile revenue growth was lower (0.1%) than mobile service subscriptions growth (4.6%) during the period 2014-2019, highlighting the structural challenges faced by mobile operators. Declining voice & SMS revenue only partially offset by wireless data monetisation is putting pressure on ARPU, compounded by a reduction of dual-SIM cards feature, driving the lower growth in mobile subscriptions.
Population growth is a major growth driver for mobile operators, a slowdown in mobile subscriptions growth which will put long term pressure, dialling up competition for the three mobile operators fighting for fewer new customers.
According to our benchmark study of mobile data pricing, China had the biggest cost reduction per GB over the last 3 years, while India has the lowest rate in the world with just a few cents per GB and Singapore remains expensive.
Idem Est Research estimates that China could finish 2020 with about 200m 5G subscribers and that this number could rise to as many as 600m by 2025 (making up about 40% of 5G subscribers worldwide).
The fixed broadband market is experiencing strong growth mostly driven by China Mobile's push into the market over the last six years to become the market leader. Fixed broadband subscriptions are very affordable in China generating lower ARPU than than a mobile subscription, a market singularity as in most markets, fixed broadband services are usually at least twice more expensive than mobile services.
Fixed broadband penetration is forecasted to grow modestly as China's investments on full-fibre networks are now reaching maturity with off with affordable packages and increased broadband household penetration growing towards saturation.
Meanwhile fixed broadband customers opted to upgrade their connections with over 85% of subscribers opting for FTTH subscriptions with speeds over 100Mbps,
Infrastructure funds, pension funds and government funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure.
Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with real industry examples and EV/EBITDA comparatives and benchmarks.
‘China Telecoms Report’ transactions database analysis highlights the dearth of inbound (domestic) transactions in the Chinese telecommunications services market, with the largest transaction being the telecommunications operators shifting assets to an infrastructure entity, China Tower Co. However, in the short to medium term, the telco sector is unlikely to experience corporate activity with the government controlling the sector and with telecommunications remaining a strategic sector with a low level of debts. Most transactions are expected in the data centre, IoT and cloud computing sector with many private sector operators and large technology companies such as Tencent, Baidu, and Alibaba.
The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.
Beijing RLZY, China Mobile, China Telecom, China Tower, China Unicom, Dr Peng, Guodong, Miteno, Sino Netstone, Tietong, Zhejiang WanXing.