China Mobile'S First Quarter Net Profit Decreased Slightly, 5G Business Input Output Ratio To Be Tested

On the evening of April 20th, China Mobile released its first quarter 2020 results as of March 31st. In the quarter, China Mobile's revenue was 181 billion 300 million yuan, down 2% compared to the same period last year. EBITDA's profit was 68 billion 500 million yuan, down 5.8% compared with the same period last year, and net profit was 23 billion 500 million yuan, down 0.8% compared with the same period last year.

China Mobile said that the decline in revenues was mainly due to the impact of the new crown pneumonia epidemic on sales of goods such as cell phone terminals and Internet of things equipment.

However, according to the economic operation situation of the telecommunications industry released in April 21st in the first quarter of 2020, the telecommunications business was less affected by the epidemic and the revenue increased slightly.

According to the Ministry of industry and information, in the first quarter, telecom revenue totaled 338 billion 300 million yuan. An increase of 1.8% over the same period, an increase of 0.8 percentage points over the same period last year, an increase of 1 percentage points from the end of last year, and three basic telecom enterprises completed 57 billion 100 million yuan and 158 billion 400 million yuan in fixed and mobile data and Internet business respectively, an increase of 7.3% and 3.8% over the same period, and the income of fixed value added business was 43 billion 900 million yuan, an increase of 18.9% over the same period last year.

So, what is the performance of China Mobile in the first quarter of this year?

Hardware business revenue decline

Under the influence of the epidemic, China Mobile's core business has achieved steady growth. The revenue of communication services in the quarter was 168 billion 900 million yuan, up 1.8% from 165 billion 900 million yuan a year ago.

However, due to the isolation during the epidemic affected the offline business, China Mobile mobile terminals, IOT equipment sales were affected. In terms of sales revenue and other revenue, China Mobile's revenue in the quarter was 12 billion 400 million yuan, down 34.9% from 19 billion 100 million yuan a year ago.

In terms of profit, the pre tax profit of China Mobile in the first quarter of 2020 was 30 billion 600 million yuan, a slight decrease of 0.2% compared with the same period last year, and the profit attributable to shareholders was 23 billion 500 million yuan, a slight decrease of 0.8% compared with that of the same period last year, but the profit margin of shareholders should be 13%, ahead of the same period last year.

In mobile services, China Mobile traffic business grew steadily. The mobile Internet traffic in the quarter was 19 billion 700 million GB, up 12.6% from the 17 billion 500 million GB in the previous quarter. The average monthly mobile Internet traffic (DOU) was 8.3GB, an increase of 16.9% over the previous quarter. In terms of short message usage, the use of SMS in the quarter was 241 billion 600 million, up 4.5% from 231 billion 200 million in the previous quarter.

However, by the replacement of OTT (Over The Top) and the infection of the new crown pneumonia, the total number of minutes of China Mobile's total calls in the quarter was 661 billion 400 million minutes, down 16.3% from 794 billion 100 million minutes in the previous quarter. In addition, the average monthly household income (ARPU) was 46.9 yuan, down 6.7% from the same period last year, but the decline narrowed compared with the previous year.

The number of China Mobile users declined by 3 million 980 thousand to 946 million in the quarter due to the isolation of new users. Among them, the number of 4G users was 752 million, a decrease of 0.8% over the 758 million quarter of last quarter, an increase of 4% over the same period last year. The number of 5G users was 31 million 720 thousand, a 1144% increase compared with 2 million 550 thousand in the previous quarter.

In terms of cable broadband business, the total number of China Mobile customers in the first quarter was 191 million, with a net increase of 4 million 100 thousand customers. The cable broadband ARPU was 31.3 yuan, down 5.2% from the previous quarter.

In April 21st, when interviewed by an economic reporter in twenty-first Century, Pan Helin, executive dean of the digital Economic Research Institute of Zhongnan University of Economics and Law, pointed out that the overall impact of the epidemic on operators such as China Mobile is not large. The main impact is the acquisition of new users, sales of hardware and enterprise applications, and traffic business is still growing.

5G is still in its investment phase.

In April 20th, the NDRC made clear for the first time the scope of the new infrastructure: information infrastructure, integration of infrastructure and innovative infrastructure, including 5G construction.

In fact, the number of 5G users has become the biggest data for China Mobile. With the replacement of OTT and 5G business, 5G business will become a new growth point for telecom operators.

However, pan Lin told the twenty-first Century business news reporter that although 5G will increase the flow of carriers, the new infrastructure is still in the stage of investment. 5G's contribution to this year's performance will not be too great. It may have a good supporting role for China Mobile's performance in the next one or two years, but this year it will still be invested.

At present, the three operators are increasing investment in 5G, and pay close attention to deploying 5G base stations.

In February 21st, China Unicom launched a video conference on investment and construction during the national epidemic. It said it would cooperate with China Telecom to complete the construction of 250 thousand base stations in the first three quarters. In February 29th, China Mobile said that the goal of building 300 thousand 5G base stations in 2020 will not change. That is to say, the three operators expect to build 550 thousand 5G base stations this year.

Pan and Lin pointed out that 5G business really accelerated the release of 5G users, but operators' input to output ratio of 5G still depends on the market effect and promotion speed. "The number of 5G users will be released this year, but the explosive growth will require the improvement of the entire infrastructure. This year and next year, 5G is still in the period of investment.

In addition, although the promotion of 5G has been affected by the epidemic, 5G applications, including telemedicine and HD live, have brought new prospects to the industry. The demand for 5G will grow in the second half of this year.

It is worth mentioning that in April 20th, China Mobile announced the latest progress in this year's "5G Mount Everest" special action, and deployed 5G to Mount Everest.

As at 15:30 on April 19th, China Mobile and HUAWEI completed the opening of 3 5G base stations at the 5300 meter Mount Everest base camp and 5800 M transition camps, and it is estimated that the 2 5G base stations of 6000 m advance camp and the construction of all points will be completed by April 25th.

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