China’s true 5G uptake gained some clarity this week, with China Mobile officially revealing the number of subscribers with both 5G service plans and handsets reached 190 million at end-2021, a year-on-year increase of 112 million, representing just under half of the 5G package customers it continues to tout.

The market leader closed 2021 with 387 million 5G package customers, more than doubling year-on-year.

Unfortunately, the other two players weren’t so forthright in their 2021 earnings statements. China Telecom’s 5G package customers increased by 101 million to 188 million, while China Unicom ended the year with 155 million, up from 78 million at end-January 2021, the first month it reported figures.

Assuming half of China Telecom and China Unicom’s 5G package customers are real 5G users, in line with China Mobile’s percentage, means the two would have 94 million and 77.5 million 5G subscribers respectively.

That brings the country’s 5G total down to 361.5 million, or 22 per cent of its overall mobile user base, which is more in line with penetration rates in South Korea some 26 months after the service launched.

ARPU inches up
Looking at the impact of 5G services on ARPU, the story was mixed. All three booked modest gains in total ARPU (see chart, left, click to enlarge).

Hidden in China Telecom’s standard earnings documents was this telling data point: 5G ARPU dropped 18.8 per cent from 2020 to CNY53.30 ($8.37). Its rivals didn’t disclose year-on-year 5G ARPU changes.

Matthew Iji, director of modelling and forecasting at GSMA Intelligence, suggested to Mobile World Live the sharp decline was due to increased uptake of discounted plans amid rising competition, and pressure from the government to lower tariffs, to attract new users to their respective 5G networks.

He noted high-value customers in the big cities were the first to move to 5G. “These customers spend more – not because they are on 5G but, because they are higher spenders. As adoption increased, medium spenders moved on to 5G,” which resulted in an ARPU hit.

Confusing the matter, China Mobile said 5G ARPU reached CNY82.80 at end-2021, up 7.5 per cent vs pre-migration 4G rates. It didn’t offer a comparative 5G number for 2020.

In terms of 5G data consumption, China Telecom claimed average monthly 5G data usage of 24.1GB while China Mobile indicated 22GB (again no figures from the previous year).

Capex guidance
After three years of heavy spending, the operators are only tapering back on 5G capex. China Mobile’s 5G capex will slip from CNY114 billion in 2021 to CNY110 billon this year, with plans to take its base station count from 730,000 at end-2021 to 1.1 million (including 480,000 700MHz sites). China Telecom aims to reduce 5G capex by 10.5 per cent this year to CNY34 billion.

The number of 5G base stations it uses with China Unicom is forecast to increase by 300,000 to nearly 990,000 by year-end. China Telecom indicated its aggregate savings on the joint network investment topped CNY210 billion.

Both China Mobile and China Telecom committed to marginally raising overall capex in 2022. China Unicom didn’t provide a guidance for 2022: Last year it cut investment in mobile networks from CNY37.9 billion in 2020 to CNY33.8 billion.

In terms of 5G forecasts, only China Telecom set a target, estimating the addition of 80 million 5G package customers in 2022.

My big wish this year is for the Big Three to release 5G numbers that come close to matching the compatible handset figures analyst companies and government agencies release. Perhaps that’s in the cards for 2023 – it took China Unicom 15 months to release its first inflated 5G figures.