China: Market Updates and Commercial Opportunities in the World’s Largest 5G Market

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By Victor Xu | 2Q 2023 | IN-6914

Consumer 5G penetration rate in China is among the highest globally at over 60% and growth in enterprise 5G revenue for China’s big three Mobile Network Operators (MNOs) have averaged over 20% Year-over-Year (YoY) growth. This ABI Insight provides a brief overview of the latest market developments of 5G technology and the factors augmenting a positive 5G outlook in China.

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Market Updates from China's Big Three Mobile Network Operators


From the latest financial figures (Fiscal Year (FY) 2022) posted in March 2023 by China’s big three Mobile Network Operators (MNOs)—China Mobile, China Unicom, and China Telecom—it is evident that the consumer 5G penetration rate, enterprise 5G adoption, and the use of digital services by enterprises have been growing.

For FY 2022, 5G subscribers’ penetration rates were at 63%, 68.5%, and 66%, for China Mobile, China Telecom, and China Unicom, respectively. In comparison, the 5G penetration rates in Singapore were estimated to be at approximately between 16% and 26% for Singapore’s big two MNOs, South Korea’s big three MNOs average approximately 50%, and Japan’s big four MNOs average roughly 18%. On the 5G subscribers front, China’s big three all reported significant increases in subscription numbers, with China Telecom registering an increase of a whopping 80% in 5G mobile subscribers Year-over-Year (YoY), while China Mobile and China Unicom both recorded an increase of 58% and 37%, respectively, during the same period.

Also, China’s three main MNOs have reported significant business services uptake due to enterprise digital transformation and adopting 5G connectivity options. In FY 2022, China Mobile recorded revenue growth of roughly 23% for its business segment with its corporate customer base increasing by 4.37 million to 23.20 million. China Mobile’s 5G dedicated network revenue also registered approximately US$370 million, an increase of 107% YoY. This is backed by strong momentum in enterprise 5G adoption as China Mobile reported 2,300+ smart factories, 400+ signed smart grid projects, 370+ smart mining operations, 4,900+ smart city projects (covering 31 provinces), and 2,000+ partnerships in smart health projects to date. Similarly, China Telecom reported an increase of about 20% in revenue for its Industrial Digitalization business segment. For its enterprise/business 5G portfolio, China Telecom reported that it has approximately 15,000 cumulative 5G-to-Business (5G2B) (or 5G enterprise) industry commercial projects. The growth of 5G2B projects has doubled from 4,000 to 8,000 YoY. Meanwhile, China Unicom has also reported that it has built over 16,000 large-scale 5G application projects cumulatively and that it has engineered more than 1,600 fully 5G-connected factories at the end of 2022 with its Industry Internet revenue growing by roughly 29% YoY.

5G in China: Consumer and Enterprise


Consumer 5G: Strong Subscriber Base in China

According to the latest business figures released by China’s big three MNOs, the 5G user base has surpassed 1 billion for the first time in late 2022, with the big three averaging approximately a 58% increase each in 5G subscription numbers YoY. For comparison, the U.S. International Trade Administration (ITA) estimated the Singapore 5G subscriber base to be at approximately 900,000 in 2Q 2022. Elsewhere in the Asia-Pacific region, the 5G subscriber base stands at approximately over 4.5 million, 45 million, 28.06 million for Australia, Japan, and South Korea, respectively, as of 4Q 2022. The 5G subscription numbers in China are staggering and the 5G adoption rate is among the highest globally. Current 5G consumer applications in China have largely centered around High-Definition (HD) video streaming and Augmented Reality (AR)/Virtual Reality (VR) applications, as 5G’s key strengths of increased bandwidth, speed, reliable connection, and reduced latency are crucial for enabling HD video streaming and immersive AR/VR applications.

Enterprise 5G: Fueling the Growth Momentum in China

The 5G enterprise market though, is the much larger commercial opportunity. Benefits of 5G performance, such as increased transmission speed (up to 10X that of 4G), increased network capacity (up to 10X more capacity than 4G), ultra-low latency (less than 20 Milliseconds (ms) round trip), and improved support for low-power devices and sensors have enabled new services and products, as well as new business models.

Having engineered the world’s largest 5G rollout, the operators are now building enterprise 5G private networks at a rapid pace. According to figures from China’s Ministry of Industry and Information Technology (MIIT), the operators have built more than 6,000 5G private networks to date. And these numbers have far exceeded the “Set Sail Action Plan for 5G Applications” national directives announced by the MIIT in 2021, which has a set target of 3,000 5G private industrial networks by 2023. Furthermore, according to the MIIT, there are new efforts to promote industrial application of 5G with official plans targeting more than 10,000 5G factories by 2025. 5G looks set to accelerate the new industrial revolution in China through its deployments in diverse verticals, such as in the mines, factories, logistics, manufacturing, healthcare, marine ports, energy, agriculture, etc. For one, the healthcare sector has been among the most popular use cases for 5G private networks in China, and telemedicine, remote and Artificial Intelligence (AI) assisted consultations and diagnoses have been crucial in expanding medical care reach and the efficiency of medical treatments across China. China’s agricultural sector, an important economic sector, has also benefited from deploying 5G and AI technologies, as they have been used in the private networks to guide planting decisions, and in smart machinery to replace manual labor, helping farmers improve their efficiency and incomes in the process.

Robust Upside for 5G in China


Ever since China officially kicked off its 5G commercialization in 2019, it has established itself as one of the leaders in 5G technology. And China has shown few signs of slowing down and looks set to continue as one of the main pacesetters in 5G as strong political capital and the opportunity in enterprise 5G will continue to provide momentum for the growth of 5G.

First, China’s political leadership has viewed 5G technology as crucial in upgrading its traditional industrial base for the digital economy and a key enabling technology to become a major player in the next generation of the Internet. Right out of the gate, the government’s commitment to 5G has been strong, and policies and regulations have been geared toward super-charging the development of 5G technologies. With government investments, 5G development in China has been in the fast lane with significant rollouts of 5G base stations by the three largest state-owned MNOs—China Mobile, China Telecom, and China Unicom. According to the latest data from the MIIT, the total number of 5G base stations in China already exceeded 2.3 million in February 2023, accounting for more than 60% of the estimated global use base. Official sources from the MIIT have also mentioned that China has been forecast to end 2023 with more than 2.9 million 5G base stations. Besides strategic investments, the government has also partnered with local and international technology manufacturers, enterprises, and industrial associations to establish a 5G technology ecosystem to further drive enterprise 5G adoption.

Second, China’s “5G+Industrial Internet” has also been in the fast lane, and according to the MIIT at a year-end 2022 conference, more than 4,000 projects are in construction nationwide with a number of high-level fully 5G-connected factories. It was also mentioned that the 5G+ Industrial Internet projects cover more than 20 key industrial sectors of China’s national economy, such as iron, steel, and electric power. Industrial Internet applications are found in smart factories, warehouses, and ports, and they are an interchangeable term with enterprise Internet. An official from the MIIT also mentioned in a conference in late March 2023 that the size of China’s Industrial Internet sector has reached CNY1.2 trillion (US$170 billion). ABI Research expects that growth in the China “5G+Industrial Internet” will continue to be a key driver of China’s digital economy.

Enterprise 5G in China is expected to continue growing and China will remain a dominant player in the 5G space largely due to the strong government support and the broadening enterprise 5G commercial market. ABI Research forecasts that the enterprise 5G market revenue potential in China will reach a combined ~US$7.65 billion in 2026, growing at a Compound Annual Growth Rate (CAGR) of 113% from 2022 to 2026, across multiple verticals (e.g., manufacturing, healthcare, logistics, utilities, and energy, among others).



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