For the first three quarters of 2020, the operating results of the Company remained solid. The operating revenues were RMB292,614 million, representing an increase of 3.5% over the same period of last year; of which the service revenues were RMB280,868 million, representing an increase of 3.5% over the same period of last year. EBITDA was RMB92,210 million, representing an increase of 0.3% over the same period of last year. EBITDA margin (calculated based on EBITDA divided by service revenues) was 32.8%. Profit attributable to equity holders of the Company was RMB18,706 million, representing an increase of 1.7% over the same period of last year.
For the first three quarters of 2020, the Company proactively promoted 5G network co-building and co-sharing and accelerated 5G business scale commercialisation. As of the end of September, the number of the Company’s mobile subscribers reached 349 million, representing a net addition of 13.78 million; of which the number of 5G package subscribers reached 64.80 million, representing a net addition of 60.19 million. The average mobile service revenue per user per month (ARPU) was RMB44.4 while the decline rate was continuously narrowed.
After completion of originally planned 250k 5G BTS buildout, the Company had about 300k 5G BTS in use covering all prefectural-level cities nationwide by end-Sep 2020. The Company is planning to co-build and co-share extra 5G BTS in 4Q20, with over 350k 5G BTS in total will be in use by end-2020, while CAPEX budget remains unchanged.
The Company led the development and release globally of “5G SA Implementation Guidelines”, supported the enriching and flourishing of the 5G SA ecological environment. Within the 3GPP R16 standards, the Company led the formulation of 10 technical standards and the completion of the 5G “Super Uplink” core standard, which was included as one of the key features for 5G R16 standards. The Company ranked first amongst global operators in terms of the number of 3GPP RAN projects initiated. The Company conducted proprietary R&D for lightweight UPF products with high-efficiency connection to the 5G core network, which enabled lightweight, low-cost and flexible deployment of 5G, propelling 5G endowment to vertical industries.
For the first three quarters of 2020, the Company expedited the integration and mutual promotion between broadband and Smart Family which facilitated the value restoration of broadband service. As of the end of September, the number of wireline broadband subscribers was approximately 157 million, representing a net addition of 3.62 million with gradual rebound in the growth rate of the revenue from broadband access. The decline rate of the broadband access ARPU was further narrowed compared to that of the first half of the year.
For the first three quarters of 2020, the revenue from e-Surfing HD and Smart Family applications and services (include services such as Whole-home WiFi and Family Cloud, among others) continued to increase rapidly. Broadband blended ARPU was RMB44.1, representing an increase of 2.1% compared to the same period of last year.
For the first three quarters of 2020, the Company accelerated the integration and innovation of new technologies and continuously expanded the market potential for Industrial Digitalisation (includes IDC, Industry Cloud, Network Dedicated Line, Internet of Things (IoT), Internet Finance, system integration services and other informatisation services). Revenue from Industrial Digitalisation amounted to approximately RMB63,436 million, representing an increase of 6.9% compared to the same period of last year and maintaining an industry leading position in terms of revenue size and revenue proportion, of which revenue from IDC reached RMB21,584 million. The Company sped up the advancement of cloud-network integration strategy of “Cloud central, Network around, Network adaptive to cloud, Cloud and network as one”. Revenue from Overall Cloud (includes Industry Cloud, Family Cloud and access service directly related to cloud, etc) amounted to approximately RMB8,046 million and maintained rapid growth with further elevation in size.
Taking shareholders’ returns into full consideration, alongside the Company’s profitability, cash flow level and capital requirement for its future development, the Board of Directors has decided to recommend at the forthcoming shareholders’ meeting that a final dividend equivalent to HK$0.125 per share for the year 2019 to be declared. Going forward, the Company will continue to create shareholder value, while fully balancing the cash flow required for the long-term development of the Company with returns to shareholders.
The CAPEX budget including 5G in 2020 is RMB85 billion, of which CAPEX budget dedicated to 5G is RMB45.3 billion, remaining unchanged from the guidance given at the beginning of the year. In the first half of 2020, CAPEX was RMB43.1 billion, representing an increase of 23.4% over the same period last year.
The Company accelerated the advancement of its cloud-network integration strategy of “Cloud central, Network around, Network adaptive to cloud, Cloud and network as one”, and continued to establish the capabilities system in terms of resource, technology, ecology, application, security, and endowment for e-Surfing Cloud.

The Company adopted 5G standalone (SA) architecture as the best practice for cloud-network integration and continued to strengthen its technological innovation. After having launched the world’s first SA commercial network capability in 2019 in Shenzhen, the Company accelerated the construction of a nationwide SA network for commercial use. In addition, the Company also expedited the construction of high-quality optical transport networks (OTN) for government and enterprise customers, and superior CN2-DCI carrying networks, alongside e-Surfing Cloud intelligent network based on SD-WAN. The Company also completed the construction of a nationwide ROADM backbone network and achieved unified allocation of network resources, further strengthening its leading edges in networks.
In the area of cloud resources, the Company quickened its unified deployment of cloud and IDC based on “2+4+31+X” layout and forged differentiated competitive advantages. The Company built mega-scale IDC parks in Inner Mongolia and Guizhou to meet the needs from national sizeable customers. In the four most economically developed regions of China namely Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macau, and Sichuan-Chongqing-Shaanxi, the Company deployed IDC on a large-scale around core cities, covering the surrounding areas. Across the key cities of the 31 provinces nationwide, the Company consolidated provincial cloud resource pools to meet localised business needs. At the edge of the network, based on the resources of nearly 60,000 exchange buildings and integrated access offices, the Company built massive edge nodes, leveraging the technical feature of 5G MEC to meet the requirements for low latency at the millisecond-grade for use cases such as industrial Internet and autonomous driving. At present, the total number of the Company’s IDC sites exceeds 600, which is the largest in number and also most widely deployed in China. The number of cabinets is over 380,000, of which 80% are deployed in the four economically developed regions while 60% are concentrated in mega-scale and large-scale data centres. With prominent data-orientated characteristic and significant edges of centralisation with efficiency, the national average cabinets utilisation rate is 70%, which is higher than the industry average with room for further expansion. In the future, the Company will continue to expedite the construction of large-scale data centres in the four regions of Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macau, and Sichuan-Chongqing-Shaanxi. The Company will continue to consolidate its leading competitive advantages in IDC leveraging the unique edges of operators, including Internet access capabilities, flourishing product portfolio, secure and reliable service assurance, and strong customer resources.
The Company accelerated the transformation of its development mode, deepened value management, enhanced the capability of its full channel operation, and built up its customer-oriented, digitalised and integrated online and offline channel system. The Company carried out intelligent analysis of target users’ personalised needs to enhance the quality of products and services while promoting information applications. The Company continuously reduced channel costs and wireline terminal costs, effectively enhancing the effectiveness of its market expansion. The Company ranked first within the industry for satisfaction in terms of public users, handset Internet access and mobile voice, while also maintaining an industry-leading position in overall customer satisfaction.
In the second half of 2020, the Company will strive to maintain healthy service revenue growth, maintain profitability and stable dividend. For 5G and mobile business, the Company will maintain mobile momentum with dual emphasis on quantity and quality for value and quality enhancement. The Company’s 2020 target is 15 million mobile subs net add and 80 million 5G package subs net add. For broadband and Smart Family, the Company will focus on family informatisation development with stepped up effort on broadband and Smart Family service upgrade, with a target of 5 million broadband subs net add in 2020. For Industrial Digitalisation, the Company will expedite transformation into cloud-centric Industrial Digitalisation development model, with Industrial Digitalisation revenue targeted to achieve double-digit growth.

Last updated on 03 October 2020

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