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Business Review

In 2020, we placed a steadfast focus on customers and continued to enhance our scale-based and value-oriented business operating system, relentlessly promoting the integrated development of our “Customer” (C), “Home” (H), “Business” (B) and “New” (N) markets. We further cemented our basic capabilities while driving transformation in sales and marketing, as well as in intelligent operations. Our products have become more competitive in the market and our service quality has continued to improve. Our overall business achieved healthy growth, along with increasing customer satisfaction. Our operating revenue amounted to RMB768.1 billion, of which revenue from telecommunications services was RMB695.7 billion, representing an increase of 3.2% year-on-year.

Key Operating Data
2019 2020 Change %
Mobile Business  
Customer Base (million) 950 942 –0.9
Of Which: 4G Customer Base (million) 758 775 2.3
5G Package Customer Base (million) 2.55 165
Net Additional Customers (million) 25 –8.36 –133.2
Of Which: Net Additional 4G Customers (million) 45 17 –61.9
Net Additional 5G Package Customers (million) 2.55 162
Average Minutes of Usage per User per Month (MOU)
(minutes/user/month)
287 267 –6.9
Average Handset Data Traffic per User per Month (DOU)
(GB/user/month)
6.7 9.4 39.0
Average Revenue per User per Month (ARPU)
(RMB/user/month)
49.1 47.4 –3.5
Broadband Business  
Wireline Broadband Customer Base (million) 187 210 12.4
Of Which: Household Broadband Customer Base (million) 172 192 11.7
Wireline Broadband ARPU
(RMB/user/month)
32.8 34.0 3.7
Household Broadband Blended ARPU
(RMB/user/month)
35.3 37.7 6.9
Corporate Business  
Corporate Customer Base (million) 10.28 13.84 34.6
IoT Smart Connections (million) 884 873 –1.2
The “Customer” Market

We proactively made adjustments to our business strategy, shifting the emphasis from expanding our customer base to cultivating quality and value. We accelerated the development of a holistic product portfolio comprising data access, applications and customer benefits, and further integrated the operations of our three consumer brands– GoTone, M-zone and Easy Own. We also adopted an integrated marketing approach with a view to stimulating customer demand for 5G products by actively promoting 5G handsets, customer benefits, service packages and intelligent hardware, leveraging the distribution of 5G consumption vouchers. To boost sales of mobile devices, we introduced more financing options, including particulate loans and 5G gold coins, in addition to credit purchase. Driven by fast-growing 5G business and our marketing approach to integrating content and customer benefits, we have gradually stabilize our position in the “Customer” market and our 5G business achieved robust growth. As of the end of December 2020, the number of 5G package customers reached 165 million, accounting for 17.5% of our mobile customer base. The number of average net additional customers per month exceeded 13.5 million, a growth pace that is industry-leading. Post 5G migration, ARPU and DOU of 5G package customers increased by 6.0% and 23.7% respectively, showing promising growth potential for the value of the 5G business.

The “Home” Market

Leveraging our core gigabit broadband products, we focused on enhancing our broadband quality and strengthening the integrated development of broadband, hardware and applications to encourage customers to upgrade their plans. We promoted integrated development of “big screen” contents with other household applications, bolstered entry points for household information services and accelerated the formation of an ecosystem comprising cinemas, film distributors and vertical content providers. We focused on expanding our three main business lines, i.e. smart home network deployment, home security and smart remote controls, to enrich our smart home applications. By launching various initiatives to attract target customer groups, retain existing customers by segmentation, foster synergetic growth of TV services and promote smart home applications, the “Home” market demonstrated robust growth with a steady increase in customer value. As of the end of December 2020, the number of household broadband customers reached 192 million, with the number of average net additional customers per month exceeding 1.67 million. Our digital set-top box “Mobaihe” registered a total of 141 million customers, with a net addition of 18.99 million and a continuous increase in penetration rate. Our customer numbers for smart home network deployment, home security and smart remote controls increased by 347%, 204% and 621% year-on-year, respectively. The revenues from household broadband and smart home application services increased by 18.6% and 25.7% year-on- year respectively, driving further growth in household broadband blended ARPU.

The “Business” Market

We further expanded and optimized our products and solutions for our corporate business with a steadfast focus on customer demands, using a selective and dynamic approach to update what to include in our product portfolio. With an emphasis on innovation, we enhanced the quality of a range of basic products, such as dedicated lines, IDC (Internet Data Center), IoT (Internet of Things) and corporate short messages, to scale the growth of the corporate business. We built industry-leading cloud business, developed more signature products and enhanced product quality. Public cloud offerings have become the driver for our customer base expansion and private cloud offerings the driver for revenue growth. The revenue and market share of our mobile cloud services both scaled up substantially. We also strived to pursue a market-leading position in 5G development. Focusing on key industries and business areas, we continued to build 5G application showcases and strove to promote scale conversion. We also developed standardized and dedicated 5G products. As a result, we maintained our leadership within the industry for driving 5G adoption across vertical sectors. In 2020, our IDC business recorded revenue of RMB16.2 billion, representing an increase of 54.4% year-on-year. A total of 360,000 IDC cabinets were available for use, with top-tier Internet companies, government departments and financial organizations as our key customers. The number of IoT smart connections reached 870 million and IoT business revenue amounted to RMB9.5 billion. Our mobile cloud business revenue reached RMB9.2 billion, an increase of 353.8% year-on-year. This growth rate outpaced those of our peers. We introduced more than 200 proprietary IaaS (Infrastructure as a Service), PaaS (Platform as a Service) and SaaS (Software as a Service) products, and over 2,000 jointly developed SaaS products for the mobile cloud business. The ICT business generated revenue of RMB10.7 billion, representing an increase of 59.4% year-on-year.

The “New” Market

In terms of the international business, we strived to minimize the negative impact of the COVID-19 while expanding our international operations and business scale. Our international business maintained positive growth momentum, thanks to our continued efforts to strengthen key product capabilities such as cross-border cloud and network services and DICT. We upgraded our extensive global coverage comprising Information Highway (connectivity resources), Information Station (PoPs, Points of Presence) and Information Island (data centers), and deepened our collaborations with international telecommunications service providers. In terms of equity investment, we built out a professional capital management system that conforms to standards, leveraging the complementary strengths of direct investments and investment funds to create greater synergy and achieve higher impact. We focused on investing in a range of sectors, including information and communications infrastructure and technologies, cloud computing, AI (artificial intelligence), information security and digital content, in order to further unleash the potential of our capital. In terms of digital content, we leveraged our position as a content synthesizer and producer to foster an industry-leading content ecosystem. As a result, we recorded rapid growth in the number of active users for a variety of businesses, including MIGU Video, cloud-based games and video connecting tones. With regard to FinTech, building on the and-Wallet brand, we rapidly expanded our business and achieved solid growth in terms of credit purchase, investment products and supply chain financing. We also made sound progress in research in the areas of super SIM card, digital identity applications and digital currency applications.

Basic Networks

We are now at a key juncture for further transformation and 5G network construction. On the one hand, we need to focus on laying a foundation for the integrated development of the CHBN markets, and consolidating our 5G market leadership for our next stage of development. On the other hand, we also need to better manage our investments and optimize our investment structure to help allocate resources rationally to ensure our competitiveness and long- term development, so that our investments can generate the expected benefits. We sped up the upgrade of our basic network capabilities, strengthened our competitive advantages in network resources and actively created premium 5G networks. With regard to household broadband, transmission networks, data centers, international facilities and others, we continued to strengthen our capabilities to support business growth. Meanwhile, we took proactive steps to better coordinate and plan our cloud computing services and bolstered our cloud capabilities, at the same time, strove to build new infrastructure for cloud and network convergence. By doing so, we promoted the cloudification and intelligent transformation of our networks. As of the end of 2020, we have operated the world’s largest premium 4G network and built the world’s largest 5G SA (standalone) network. The number of our base stations reached 5.14 million. Our transmission lines covered 19.94 million cable kilometers and the bandwidth of our international submarine cables continued to increase. We officially started the large-scale commercial application of our NFV (Network Function Virtualization) technology and introduced SDN (Software Defined Networking) technology to dedicated cloud-based networks and IP networks, achieving a leading position in the industry.

In 2020, our total capital expenditure was around RMB180.6 billion. In 2021, we will continue to leverage our advantages in co-construction and sharing, and adopt a forward-thinking and precise approach to allocating resources to increase the competitiveness of our networks. We plan to spend total capital expenditure of around RMB183.6 billion, which will be mainly used for constructing premium 5G networks, building cloud infrastructure, supporting the development of our CHBN markets and enhancing intelligent operations, among others. Of this, capital expenditure related to 5G will be around RMB110.0 billion. The funds will come mainly from cash flows generated from daily operations.

Smart Mid-end Platform

Adapting to new growth models, we have initially completed the construction of a smart mid-end platform with both operators’ generic and China Mobile’s specific characteristics. The platform combines operations, data and technology in an AaaS (Ability as a Service) service architecture and we expect it will serve the objectives of building up our capabilities, supporting our development and empowering business growth with digital intelligence. As of the end of 2020, our smart mid-end platform had rolled out 27 applications during the first phase of its development. Of these, the business-focused mid-end platform has built up nearly 100 capabilities covering 15 areas including customers, orders and products. The data-focused mid-end platform gathered valuable data from across our network, storing over 230PB of data in total and generating over 8,000 data models. The technology-focused mid- end platform, comprising AI, blockchain, cloud container and other technologies, has begun to take shape. The smart mid-end platform will support the steady implementation of targeted marketing, specialized services, efficient network operations and precise management, facilitating our digitalized and intelligent operations.

Product Development

We have further developed our product management and operating mechanism, putting in place a five-in-one product management and evaluation system that allows us to exercise better supervision over the product lifecycle. We reviewed our overall product portfolio and categorized our products into platform gateway, key revenue generators, 5G commanding products, among others. This product categorization enables us to derive specific paths of development for individual products, which in turn facilitates us to develop our key products both qualitatively and quantitatively. Specifically, 5G messaging, as one of the key products, has completed the basic business platform infrastructure and the corresponding user cutover migrations in eight major business regions. We have also completed the digital infrastructure for the unified messaging platform and launched our industry messaging module. In terms of our cloud business, our cloud product “and-Caiyun” has seamlessly merged personal and household clouds, allowing us to offer one single unified cloud for all customers. We have launched a cumulative 86 versions of the cloud and evaluation of its key functions shows that the performance of our cloud is better than that of many leading players in the market. CM Passport, our mobile authentication, has connected more than 15,000 applications and covered 85.5% of mainstream applications. The daily average deployment of authentication exceeded 1.4 billion times. All these figures are industry-leading.

Brand Operations

We initiated a full-blown branding campaign, focusing on enhancing the operations, communications, processes and coverage. Leveraging 5G growth opportunities, we continued to optimize the operations of GoTone, M-zone and Easy Own and gave the three brands new characters and new values to support precise customer management and relationship maintenance, with an aim to cultivate higher value and customer loyalty. We launched first-class GoTone services covering rewards, products, services and ecosystem, giving customers a greater sense of privilege and gain. As a result of increased brand impact, GoTone’s customer base has exceeded 170 million. With regard to M-zone, which has a brand character of innovation and youthfulness, we targeted our brand marketing efforts towards the younger generation. Sales of our products such as the celebrity-endorsed M-One card, M-zone Passport and 5G mystery boxes have grown at an encouraging rate. Meanwhile, Easy Own, which features a down-to-earth, reliable and smart-spending brand position, has restructured its loyalty point scheme.

Channel Transformation

In order to respond to customer demands more quickly and effectively and achieve high-quality development, we have sped up our channel transformation with the aims of adding diverse customer touch-points and putting in place a digital and all-encompassing new marketing and sales system. We also took measures to support two-way traffic flows online and offline. All these efforts satisfied customer expectations for one-stop service catering for different scenarios. In addition, we sped up the shift to a chain operating model of offline outlets to increase efficiency. We have further optimized the deployment of retail outlets and boosted the sales capabilities of our online channels. Online sales as a percentage of total sales continued to rise. We formed sales alliances that are accessible from all devices and all channels, moving product shelves, e-commerce applications and our mid-end platform onto the cloud. We have enhanced our operating efficiency and sales capabilities as a result of better product convergence and channel integration, as well as enhanced platform digitalization. Elsewhere, we furthered the implementation of grid operations, defining clearly their respective responsibilities, rights and benefits. As of the end of December 2020, all our prefecture-level city subsidiaries across China had implemented grid operations. The transformation of channels has benefited the businesses by further reducing selling expenses as a percentage of revenue in 2020.

Customer Services

Putting customers at its heart, our Company has sped up the building of a service system covering every process and aspect of service, and involving every employee. As a result, our service efficiency and quality increased steadily, helping us to generate better value from our services. We set up the ‘10086’ integrated smart services gateway to continuously improve the customer experience at service touch points. We continued to consolidate our data, capabilities and smart services to upgrade our customer service system. With the support of big data technology, our customer services have become more precise and more proactive. We have launched campaigns to increase customer satisfaction, protect consumer rights and increase complaint-handling efficiency. Customer experience hence improved substantially. Through initiatives such as ‘Service Satisfaction 365’ and ‘Quality Service Campaign’, we have generated more positive feedback from customers. In 2020, we saw increased customer satisfaction with mobile Internet, tariff packages, household broadband and other businesses, and the number of complaints related to key areas of concern dropped significantly.

In 2021, we will follow the main line of development that aims at promoting digitalized and intelligent transformation and achieving high quality development. We will strive to work on the following four areas.

Firstly, we will expedite the construction of information “highway”, which consists of first-class new information infrastructure for information services. We will focus resources on 5G-oriented digital and intelligent facilities to ensure the smooth flow of information to support social and economic development. We will continue to strive for standardized and efficient scaling-up of our networks while promoting integration and innovation to improve network performance. We will also strengthen operations and maintenance of the networks to enhance user experience.

Secondly, we will operate information “high-speed train” by introducing innovative operating practices to cater the need of information services, generating new demand with our quality offerings in order to drive the development of the Company. We will continuously guide and explore new use cases, products and business forms surrounding online, intelligent and cloud services, increasing the value of our Company. We will drive the comprehensive and integrated development of our CHBN markets to form a strong foundation for value generation. We will nurture leading platform products and value of product portfolios, at the same time enhance marketing and sales and enrich ways to enhance our value-based operations. Additionally, we will cultivate open collaboration within the ecosystem and create greater opportunities for value generation.

Thirdly, we will spearhead the construction of smart mid-end platform to enhance our transformation towards digital intelligence. The smart platform will be a single and unified one as we enhance the upper layer architecture and coordinate the systems to be included in it. The technology-focused mid-end platform will pool shared capabilities and give rise to new capabilities for scale application. The data-focused mid-end platform will turn raw data into assets and capital, while the business-focused mid-end platform will enable the accumulation of operating experience, and the sharing and standardized replication of it. The mid-end platform is expected to support internal operations and external sharing of capabilities.

Lastly, we will continue to drive reforms and innovation, and to instigate vitality within the Company and motivate high-quality development. We will implement the three-year reforms covering governance, talent development and incentive mechanisms. We will continue to optimize the organizational structure that supports our strategy of headquarters to set strategies, regional companies to drive market development and specialized teams to enhance competence. We will implement key reform projects and foster our new strengthens arising from technology and innovation.

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