China Telecoms Forced to Drop Prices and Increase Coverage

Big Three ordered to reduce mobile data tariff by 30%.

China Telecoms can’t catch a break.  In 2017, the beleaguered telecoms were forced to stop charging headset long-distance and roaming fees and to reduce the internet prices for small and medium enterprises.  This year, as they struggle to increase 4G implementation and add Broadband customers, they’re being told to lower prices and increase coverage and speed.  Per the Hong Kong Filings of the China Mobile 941 hk, China Unicom 762 hk, and China Telecom 728 hk..

Presented in the Government Work Report presented in the first session of the 13th National People’s Congress of the People’s Republic of China convened on 5 March 2018,

  • increase efforts in implementing network speed upgrade and tariff reduction measures;
  • achieve full coverage of high-speed broadband in cities and rural areas;
  • expand the coverage of free Wifi Internet access in public areas;
  • substantially reduce the tariffs of household broadband, corporate broadband and dedicated leased line;
  • cancel data “roaming” fee;
  • reduce mobile data tariff by at least 30% in this year.

The three declined on March 5th, along with the HSI and HSCEI indexes but have under-performed year to date and on a monthly basis.  Based on this edict, the stocks will face more declines.

Telecoms

While they haven’t submitted annual reports for 2017 yet, the third quarter showed minimal growth in terms of revenue, profits and Customers.

Telecoms Customers

Despite migrations to 4G and new Broadband customers for China Mobile and China Telecom, revenues increased less than 5% or even decreased in the case of China Unicom,  for the 9 months ending in September.

Telecom 3Q

These less than stellar numbers will be negatively impacted by the new government regulation as well as the uncertainty regarding the continuously changing tower leasing agreements following the 2015 spin-off.

 

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