We believe that Chinese Telecoms were expecting 2020 to be one of the most lucrative years in recent history. The rise of 5G networks would further increase the user base and give birth to new business and technologies. However, no one was expecting a new virus to come and change the entire world. The truth is one, after COVID-19 the world will change. The new coronavirus started in China in the end of last year. It has quickly escalated in one of the biggest concerns for every country across the world. Now, it is ravaging Europe, while in China it crossed its peak. The companies are now starting to get back to business and evaluate all the losses.
We started this article talking that the Chinese Telecoms were expecting a big increase, but with COVID-19 this turned into a loss. The carriers in China are reporting continuous drops on its user base. The Coronavirus crisis cut business activity and as a result, China’s Mobile Ltd., the world’s biggest wireless network carrier, reported its first net decline since it started to report monthly data in 2020. That’s right, COVID-19 caused its first decline in twenty years.
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According to a report from Bloomberg, China Mobile Subscriptions feel more than 8 million over January and February. China Unicom Hong Kong subscribers fell by 7.8 million in the same period. The third major carrier, China Telecom Corp, states a loss of 5.6 million users during the last month. This decline reveals how the virus is crimping growth even among businesses that provide essential services. The report states that part of this loss can be caused by migrant workers. Some of them have one subscription for where they work and another for the home region. The virus forced many of these workers to stay at home. So there’s no point in keeping this work specific subscription.
China Mobile shares fell 2.7% in Hong Kong trading Monday. In Hang Seng Index it dropped 4.9%. China Telecom slid 6.3% and China Unicom saw a decline of 6.4%. The drop in user subscriptions may be unusual for a business that is on constant growth. However, it still is pretty small if we compare it to total wireless subscriptions. If we combine the three top carriers, we have a combined number of 1.6 billion of total active subscriptions. Of course, things may improve in the coming months, since factories and other businesses in China are resuming operations.
The wave of COVID-19 infections seems to be under control in the country. According to the report, this fall won’t affect the total income expected for 2020. However, we’ll need to wait and see how things will play out in the coming months.