- China’s three major telecom companies have announced new plans to shift their investment focus from 5G to cloud computing and artificial intelligence.
- As the Chinese government proposes AI Plus, the three major telecom companies have responded by emphasising the use of AI to empower businesses.
- At present, the number of 5G base stations in China has reached 3.51 million, accounting for nearly 30% of its total base stations.
Investment diversion
China Telecom, China Mobile and China Unicom are shifting their investment focus from 5G to cloud computing and artificial intelligence. As 5G infrastructure reaches its peak, the focus on AI and cloud computing aligns with the direction of current Chinese government policy.
As the Chinese government proposes AI Plus, the three major telecom companies have responded by emphasising the use of AI to empower businesses. China Telecom has LLM TeleChat, China Mobile has Jiutian LLM and China Unicom has Yuanjing LLM.
Also read: US House bans staff from using Microsoft AI assistant Copilot
5G development is approaching saturation
According to the public data of China’s Ministry of Industry and Information Technology, as of the end of February 2024, the proportion of 5G network users in China has reached 50%. The total number of 5G mobile phone users broadcast by the three major telecom companies plus China reached 850 million, accounting for nearly 50% of the total number of mobile phone users. At present, the number of 5G base stations in China has reached 3.51 million, accounting for nearly 30% of the total number of base stations.
China Telecom, China Mobile, China Unicom have released 2023 financial results. China Telecom said its capital expenditure for 2023 was 98.8 billion yuan ($16.66 billion), up 7 percent, but did not specify the 5G investment amount separately as it has in the past.
China Telecom expects capital expenditure of 96 billion yuan in 2024, down 3%. China Telecom CEO Ke Ruiwen pointed out that the decline is mainly structural adjustment, and capital expenditure is expected to continue to decline in the next few years, unless new technologies such as 5G or 6G emerge.
Road to enterprise transformation
China Mobile, which has the largest subscriber base, said its 5G investment will peak in 2023. China Mobile expects capital expenditure to fall 4 per cent in 2024. However, investment in artificial intelligence and cloud computing will increase by 20 percent to 47.5 billion yuan.
China Unicom, the smallest of the three telecom companies, also said that with the gradual improvement of 5G network coverage, investment will shift from network communication business to computing network. China Mobile pointed out that the transformation of the enterprise faces some uncertainties. The complex and harsh external environment, coupled with international trade and technical barriers, will affect the supply chain and affect business operations.
