Business Review

In 2021, we continued our scale-based and value-oriented business operations while maintaining a clear focus on customers, driving the comprehensive and integrated development of our CHBN markets. We consolidated our fundamental competencies, and advanced channel transformation and delicate operations. Along with enhancing product competitiveness and service quality, we achieved favourable growth in our overall business, as well as increasing customer satisfaction. Our operating revenue amounted to RMB848.3 billion, of which revenue from telecommunications services was RMB751.4 billion, representing an increase of 8.0% year-on-year.

Key Operating Data
2020 2021 Change %
Mobile Business  
Customer Base (million) 942 957 1.6
Of Which: 4G Customer Base (million) 775 822 6.1
5G Package Customer Base (million) 165 387 134.4
Net Additional Customers (million) –8.36 14.97
Of Which: Net Additional 4G Customers (million) 17 47 172.3
Net Additional 5G Package Customers (million) 162 222 36.5
Average Minutes of Usage per User per Month (MOU)
267 264 –1.3
Average Handset Data Traffic per User per Month (DOU)
9.4 12.6 34.0
Average Revenue per User per Month (ARPU)
47.4 48.8 3.0
Broadband Business  
Wireline Broadband Customer Base (million) 210 240 14.2
Of Which: Household Broadband Customer Base (million) 192 218 13.5
Wireline Broadband ARPU
34.0 34.7 2.1
Household Broadband Blended ARPU
37.7 39.8 5.6
Corporate Business  
Corporate Customer Base (million) 13.84 18.83 36.1
IoT Smart Connections (million) 873 1,049 20.1
The “Customer” Market

Centered around 5G, we further enhanced the unified product suite comprising data access, applications, and customer benefits, while strengthening the joint operations of our three major consumer brands. Our two key approaches in this market were: firstly, we put a focus on package, device and network customers, strove to occupy an advantageous position in the competitive device market and managed different customer groups with precision. Fully leveraging the intersective nature of the market, we integrated our business development efforts to drive 4G customers to switch to 5G plans. Secondly, we firmly seized the opportunities brought about by the digital economy, leveraging customer demand for digital services and tapping into the platform economy. We also focused on generating more revenue from members, and by providing a series of benefit products and off-the-shelf benefit experience, we fully integrated internal and external service touchpoints and optimize our resources, thus further refining our scale-based and value-oriented operating practices. The enormous traction of 5G, coupled with integrated product benefit operations, has helped us achieve rapid breakthroughs in 5G business. As of the end of December 2021, our 5G network customer base reached 207 million, accounting for 21.6% of the total number of mobile customers. With a net addition of 148 million customers, equivalent to a monthly average net addition of more than 12 million customers, we boasted an industry-leading growth rate in this area. Meanwhile, the ARPU and DOU of 5G customers reached RMB82.8 and 22.0 gigabytes, or growth of 7.5% and 18.6% respectively, compared to the numbers before customers switched to 5G plans, helping the growth of overall mobile ARPU reverse its downward trajectory to return to positive growth.

The “Home” Market

In the Home market, our focus was on broadband quality upgrade. Following China’s Dual Gigabit Network Coordinated Development Action Plan, we strove for the synchronized coverage of Gigabit and 5G networks by promoting joint operation in high-value residential areas. We continued to optimize WiFi, FTTR (Fiber to the Room) and network deployment solutions and promoted scenario-based broadband services to drive broadband up-speed and value uplift. At the same time, we placed a focus on various new HDICT scenarios including pan security, home education, elderly healthcare and home office to consistently innovate family information services. Aligning with the smart community and digital village initiatives, we drove the scale and value growth of services such as family WiFi, home security, big screen content-on-demand, and smart voice services. By expanding the broadband customer base and consolidating the advantages of our gigabit broadband brand, we launched HDICT and other initiatives, resulting in rapid growth in the Home market and in its customer value. As of the end of December 2021, our household broadband customers reached 218 million, with a monthly average new addition of more than 2.15 million customers. Our digital set-top box “Mobaihe” registered a total of 167 million customers, with a net addition of 26.57 million customers and a continuous increase in penetration rate. Smart home network deployment, big screen content, security and other smart home businesses scaled up rapidly with 134 HDICT showcases launched. Revenue for household broadband grew by 16.6% while smart home value-added business revenue increased by 33.1%, contributing to the further growth of household broadband blended ARPU.

The “Business” Market

For the Business market, we continued to grow in scale and customer value through our focus on key products, including by developing our government and corporate product and solution lists. Scale, quality, and service improvement represented our guiding direction, from which we continued to enhance the quality of fundamental offerings such as dedicated lines, IoT and enterprise SMS and MMS, while managing to sustain growth amidst the already large base of these businesses. Cloud leadership was another focus, which saw us building up cloud-based products and other core capabilities. The technology of more than 20 of our products, including cloud server, cloud hardware and elastic public network IP, was at the forefront of the industry, allowing us to drive scale growth with public cloud and revenue growth with private cloud, and achieve rapid growth rate for the cloud business. We also maintained our 5G leadership through delivering benchmark showcases for the accelerated commercialization of 5G+AICDE1 to scale our business in various industry segments. The proliferation of 5G in the digital transformation of various sectors helped us achieve a breakthrough in our 5G dedicated network revenue. In 2021, industry cloud revenue amounted to RMB19.2 billion, with a year-on-year growth rate of 109.6%. We launched more than 230 proprietary IaaS, PaaS and SaaS products, alongside more than 2,700 jointly developed SaaS products. Our IDC, ICT and dedicated lines revenue reached RMB21.6 billion, RMB14.4 billion and RMB26.4 billion respectively, representing increases of 33.2%, 35.2% and 10.0% year-on-year. We boasted 1.049 billion smart IoT connections, a net addition of 175 million connections, boosting IoT revenue to RMB11.4 billion, or growth of 21.3% year-on-year.

The “New” Market

Our international business strove to minimize the impact of COVID-19 and scaled a higher level of globalization and greater business scope. The international business maintained favourable growth. We continued to optimize the infrastructure of our international network that comprises our Information Highways (connectivity resources), Information Stations (PoPs) and Information Islands (data centers), while strengthening cross-border cloud networks, DICT and other key products, in order to enhance our end-to-end service quality and expand our business “circle of friends”. During the year, revenue from the international business increased by 20.1% year-on-year to RMB13.3 billion. In terms of equity investment, we generated synergy through a complementary approach to direct investment and investment through funds. Our direct investment was focused on the key aspects of digital and intelligent transformation including products, networks and mid-end platforms to create a bigger collaborative “circle of relatives” through which to expand our information services. In terms of investment through funds, we strove to manage this with a more professional and market-oriented approach and on a larger scale, leveraging the funds’ function as an amplifier and radar in the market. By doing so, we further unleashed the potential of capital. In the area of digital content, we served as a content disseminator, generator and aggregator to develop an industry-leading content ecosystem, centering around sports IP, to solidify our leadership in “sports+ culture” digital content. The number of active users for MIGU Video, cloud games and video connecting tones saw relatively fast growth. During the year, revenue from the content business increased by 47.1%. MIGU Video’s monthly active customers across all platforms recorded a year-on-year increase of 45.0% and the customer base of video connecting tones exceeded 240 million. During the Beijing Winter Olympics, MIGU Video exercised forward-planning and added creative features and innovative technology such as 5G+8K Ultra-high-definition streaming, AI-powered subtitles, multi-screen viewing and HDR Vivid2. We were able to deliver uninterrupted, the most comprehensive livestreaming content that covered all 530 games and received very positive market feedback. In the area of FinTech, revenue from Internet finance increased 102.1% year-on-year, and monthly active customers of “and-Wallet” recorded a year-on-year increase of 155.7%. Our advantages in big data helped us break new ground in finance credit scoring. We continued to enhance our business where our products can be purchased with credit and we ran the largest offline purchase by installment platform in China. We also joined hands with ICBC to launch the world’s first super SIM-based digital currency payment product.

1AICDE refers to artificial intelligence (AI), Internet of Things (IoT), cloud computing, big data and edge computing respectively.

2High dynamic range video technology standard issued by China UHD Video Industry Alliance.

Attributable to our forward-thinking and targeted approach to investment, we were able to lay out an ingenious new information infrastructure focusing on 5G, computing force network and smart mid-end platform. From this foundation, we drove cloud migration and the digitalization of our network to ensure our all-round leadership in network coverage, quality, technology and customer experience, and support the comprehensive and integrated development of the CHBN markets. At the same time, we strengthened investment control and specialized management to optimize our investment structure and ensure investment efficiency, with the aim of enabling high-quality development.

As of the end of December 2021, the number of our commissioned base stations had exceeded 5.50 million, ranking first globally. Among them, 3.32 million were 4G base stations, covering more than 99% of the administrative villages across the country. The total length of our optical network reached 22.43 million cable kilometers. Our dedicated network for government administration and enterprises, and backbone transmission network boasted bandwidth of more than 1,520Tbps and 5,100Tbps respectively, while the bandwidth of CMNET, cloud dedicated network and IP dedicated network exceeded 365Tbps. We have developed digital and differentiated capacity to support public Internet, cloud-network convergence and other businesses.

We continued to optimize our international information infrastructure. As of the end of December 2021, we had more than 70 submarine and land cable resources that enabled global coverage. Our total bandwidth for international transmission reached 106Tbps and our 225 POPs covered all major countries and regions worldwide. In addition, our international roaming and 5G services covered 264 and 51 locations respectively. The worldwide users covered by our Hand-in-Hand global partnership program exceeded 3 billion.

In 2021, our capital expenditure amounted to approximately RMB183.6 billion. In 2022, we expect total capital expenditure to stand at approximately RMB185.2 billion, which will be primarily spent on areas including constructing premium 5G network, a ubiquitous and integrated computing force network, and an industry-leading smart mid-end platform, and will support the development of CHBN businesses. Of the total capital expenditure, 5G-related capital expenditure will account for approximately RMB110.0 billion. These funds will come mainly from cash flow from operating activities.

Channel Transformation

Drawing on scenario-based operations, we explored opportunities for customer acquisition by establishing a proactive and targeted customer outreach system and transforming our marketing system to a channel-driven one. Our efforts have yielded notable outcomes. Firstly, we have built a full-fledged direct sales system. We joined hands with upstream 5G terminal manufacturers and downstream sales channels in the industry chain to build a sales alliance involving all terminals and sales channels. By doing so, we have optimized the choice of terminal products, built a direct sales system and provided high-quality after-sales service. We have also deeply integrated the system with 5G, smart home, customer benefits and other businesses, gradually establishing “the handset seller of choice” reputation in the market and driving the rapid development of the 5G terminal industry chain. Secondly, we have expanded new sales channels. We have developed online marketing and sales channels, promoted the integration of online touchpoints, strengthened cooperation with leading Internet companies and rapidly increased the proportion of online sales of key businesses. We also actively carried out cross-industry pan-channel cooperation, and built a cooperative ecosystem that covers customers’ daily life and work scenarios, extending customer service touchpoints to a wide range of industries. Thirdly, we have furthered grid operations. We launched programs to drive quality improvements and clarified responsibilities. By improving grid frontline operations support, we have persistently reduced the burden on the frontline, continuously enhanced grid operations and unleashed the vitality of individual employees. As a result, we have continued to enhance our grid operation efficiency and the satisfaction of our frontline personnel. Thanks to effective channel transformation, we enhanced our go-to-market efforts in 2021, achieving favourable revenue growth, at the same time continuously lowering sales expenses as a proportion of revenue.

Brand Operations

We further promoted brand awareness by optimizing our brand structure and carrying out joint brand operations. We focused on establishing brand propositions built around GoTone’s exclusivity, M-zone’s trendiness, and Easy-Own’s popularity. Leveraging the opportunities arising from rapid 5G development, we launched products and created scenarios under these three major brands catering to customers’ needs, throughout the lifecycle of market operations. This has helped us deliver targeted operations and maintenance, increase customer value, and enhance customer loyalty. In addition, by focusing on creating a sense of privilege among mid- to high-end customers, we rewarded them with more sought-after and exclusive benefits of a higher standard, to enhance their sense of gain. We also strengthened our brand assets surrounding philanthropy, culture, and health to create customer resonance. As a result, GoTone customers scaled up to exceed 170 million. Centering around the interests of young customers, we carried out in-circle campaigns and gradually expanded them to reach new customers. We innovatively launched virtual spokespeople for M-zone and cultivated social media connections, creating a sense of being part of an in-group. Thus, the number of customers for M-zone reached 67.02 million. Leveraging customer stickiness and expanding to different verticals and the “silver-haired” customer group, we further cultivated Easy-Own as an approachable popular brand.

Customer Services

Putting customers at its heart, we sped up the building of a service system covering every process and aspect of service and involving every member of staff. As a result, our service capability and quality increased steadily, helping us to generate better value from our services. We specified standards guiding the end-to-end process of responding to customers, the customer experience in information services consumption, and product quality management. By doing so, we established a pool of new service standards, as well as new methodologies of standard-setting covering every business and process. Additionally, we launched campaigns to increase customer satisfaction, protect consumer rights and increase complaint-handling efficiency, substantially improving customer experience. Our “10086” service hotline provided round-the-clock support to all customers across all four CHBN markets. We upgraded the hotline by replacing its traditional IVR (interactive voice response) model with a smart interactive voice system that can operate on a single voice instruction from callers. With the aim of providing caring, reliable, pleasant, and hassle-free services, we continue to enhance our customer communications while promoting and implementing our “China Mobile Heartwarming Service”. In 2021, customer satisfaction with mobile Internet, household broadband and other businesses continued to improve. Customer satisfaction with our CHBN markets improved across-board, with customer complaints reducing significantly.

In 2022, we will focus on a new position, implement a new strategy, drive new infrastructure, integrate new elements and instigate new growth momentum. We will continue to be guided by digital and intelligent transformation and high-quality development and focus our efforts on the following four areas.

Firstly, we will consolidate our foundation for business transformation and build new information infrastructure. With a clear strategic focus and leveraging our strong foundation, we will advance the systematic construction of new information infrastructure centered around 5G, CFN and a smart mid-end platform, serving as the artery to help information flow throughout the economy and society. We will continue to reinforce our leading position in 5G through delivering high-quality 5G services powered by advanced technology, while striving to establish a ubiquitous and integrated CFN and stepping up our efforts in CFN standard-setting to secure industry leadership. We also plan to build the industry’s leading smart mid-end platform by spearheading its comprehensive construction and operations.

Secondly, we will promote value-oriented operations by leveraging our business scale and continuously drive the comprehensive and integrated development of CHBN markets, as well as building the new information services system. Progress and consolidation will be the dual strategy for us to achieve value-oriented operations, drawing on advantages in our business scale. Delivering competitive products will stand at the core of our operations, which will see us develop more high-quality core products and seek new models for value-oriented operations to realize consistent quality improvements and rational scale growth. We will further advance the comprehensive and integrated development of CHBN markets. In terms of the Customer and Home markets, we will steer their development from scale expansion to value uplift, while doing the reverse for the Business and New markets. In addition, we will build the new information services system integrating “connectivity, computing force and ability”, shifting our offerings from providing network connectivity and data traffic to computing force and ability, to further empower our information services with computing force.

Thirdly, we will systematically optimize our management system and further improve our service quality. In pursuit of a scientific, standardized, smart and sophisticated management model, we will optimize our management by benchmarking world-class standards. We will deepen collaboration between headquarters, regional companies, and specialized teams to generate greater synergy while embracing more quality open cooperation to enhance the digital and intelligent operation and maintenance of our network. With the principles of putting quality first and striving for excellence, we will foster competitive advantage by winning wider customer recognition. We will fully implement a service suite that involves all staff members and elements of production, as well as our entire workflow. The deepened implementation of our comprehensive service system will help us continuously improve the quality of our network, service touchpoints and products, in order to increase customer satisfaction and enhance customers’ sense of gain.

Lastly, we will foster technological innovations while deepening system reforms. To attain technology-based and innovation-driven development, we will strive for critical technological breakthroughs, promote the effective operation of the 5G innovation consortia, develop more original technologies and consolidate our role as a leader of the modern industrial chain, carrying out our responsibilities to support, coordinate and lead innovation. To unleash the vitality of the Company and build momentum for future development, we will further reforms in corporate governance, staff deployment and incentive mechanisms, as well as in technology iteration and innovation. We will continue to implement precise grid operations to form a solid foundation for talent development.

Language: English | 繁體 | 简体