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Soaring data consumption becomes major growth driver

By Ouyang Shijia | China Daily | Updated: 2017-10-27 08:43

China's three major telecommunications carriers-China Mobile, China Unicom and China Telecom-are ramping up efforts to monetize the flood of data running through their networks.

Fueled by the booming mobile internet sector, wireless data has become operators' largest revenue source, with domestic competition getting fiercer, according to Li Yi, chief researcher at the Shanghai Academy of Social Sciences' internet research center.

"It is unsurprising when you consider Chinese consumers' embrace of blossoming innovative mobile apps, covering a wide range of categories from mobile payments to the bike-sharing sector."

Soaring data consumption has become the major growth driver for carriers. According to the latest data from the Ministry of Industry and Information Technology, average monthly handset data traffic per user reached nearly 2 gigabytes in September, increasing 140 percent year-on-year.

The ministry reported that as of end-September this year, the number of the three telecom carriers' mobile phone users reached 1.39 billion, meaning nearly everyone in the country owns a mobile phone. Operators have seen wireless data traffic become their largest revenue source, surpassing the combined inflows of traditional services such as voice and text messages.

China Mobile reported its wireless data traffic revenue reached 187.7 billion yuan ($28.3 billion) in the first half of 2017, accounting for more than half of its total telecom service revenues.

The telecom giant said in an official statement on its website that because fourth-generation network development drove spending on data traffic, the company would continue to boost its 4G and data traffic operations. In the first half of the year, the company reported 594 million 4G users, with a 69 percent 4G penetration rate in mobile customers.

China Unicom and China Telecom also saw solid growth in the first half of 2017, driven by soaring data consumption.

In the first half of the year, China Unicom's total handset data surged by 325.7 percent year-on-year, with handset internet access revenue hitting 42.9 billion yuan.

China Telecom reported an aggregate handset internet data traffic increase of 126 percent year-on-year. The company's average monthly handset data traffic for 4G users reached 1.4 GB, up by 56 percent from last year.

Yang Jie, chairman and CEO of China Telecom, said in an official statement that rising data traffic demand offers big market potential.

"We will intensely focus on integration and innovation, as well as in-depth data traffic operation, so as to ensure excellent results for the whole year."

Eyeing data traffic as the core, operators have embarked on cooperation deals with internet companies, such as Tencent Holdings Ltd and Alibaba Group Holding Ltd, to introduce new forms of data traffic subscription plans.

Xiang Ligang, a telecom expert and CEO of industry website Cctime, said with the development of 4G and upcoming 5G technology, operators will earn more revenue from the wireless data traffic.

"As data traffic becomes the core part, operators will continue to develop the 4G network and innovate the form of supply to increase their competitiveness and gain a bigger user base."

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