China’s second and third largest operators — China Unicom and China Telecom — have swapped chairmen effective today, while market leader China Mobile has named an official with the Ministry of Industry and Information Technology (MIIT) as its new chairman.
Shang Bing, a vice-minister at the regulator, has replaced Xi Guohua as head of China Mobile, the company said in a statement.
Meanwhile, Unicom’s chairman Chang Xiaobing has taken the helm at Telecom, while his counterpart at Telecom, Wang Xiaochu, has become chairman of Unicom. Both executives have stepped down as executive directors of their previous companies.
Announcements on China Unicom’s and Telecom’s websites offered no explanation for the sudden change. But the move is not unprecedented. Back in 2004, Wang Jianzhou, at the time president and CEO of Unicom, took over as general manager of China Mobile (he later become chairman). Wang Xiaochu, then deputy managing director of China Mobile, was transferred to work as managing director of Telecom.
The three companies reported H1 results last week, with all experiencing slowing service revenue growth as the mobile market becomes saturated. Service turnover was flat at China Telecom, down 0.5 per cent at China Mobile and 5.3 per cent lower at China Unicom, which they blamed on the reduction in data tariffs and the impact of the country’s VAT reform.
Unicom was the only operator to report profit growth in H1 – its net profit rose 4.5 per cent. China Mobile’s net profit fell 0.8 per cent, but operating revenue expanded 4.9 per cent, while China Telecom saw its net profit drop 4 per cent and operating revenue decline 0.6 per cent.
Both Unicom and Telecom lag far behind 4G market leader China Mobile, which has 190 million 4G connections. The two were only awarded FDD-LTE licences in February, while China Mobile got its 4G start in December 2014, with TD-LTE licences.
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