For the first quarter of 2021, the Company firmly seized opportunities emerging from the digital transformation of the economy and society and promoted the “Cloudification and Digital Transformation” strategy on all fronts, achieving apparent enhancement in operating results. Operating revenues were RMB106,873 million, representing an increase of 12.7% over the same period of last year. Service revenues were RMB100,078 million, representing an increase of 8.6% over the same period of last year with the growth rate continuously surpassing the industry average. EBITDA was RMB31,052 million, representing an increase of 3.0% over the same period of last year. EBITDA margin (calculated based on EBITDA divided by service revenues) was 31.0%. The profit attributable to equity holders of the Company was RMB6,441 million, representing an increase of 10.6% over the same period of last year.
For the first quarter of 2021, mobile service revenues of the Company amounted to RMB48,417 million, representing an increase of 8.1% over the same period of last year. The Company persisted in achieving a valuable scale expansion in the mobile subscriber market. With continuous and rapid penetration of 5G, the number of 5G package subscribers reached approximately 111 million with a penetration rate of 31.2% while the number of mobile subscribers was approximately 356 million with a net addition of 5.23 million. The handset data traffic increased by 43.9% over the same period of last year. Mobile ARPU was RMB45.6, representing an increase of 2.7% over the same period of last year and becoming stabilised with an upward trend.
The Company made all-out effort to propagate network co-building and co-sharing with prominent result. 5G CAPEX in 2020 was RMB39.2 billion, and by the end of 2020, there were 380 thousand 5G base stations in use, effectuating contiguous outdoor coverage for all prefecture-level or above cities and some developed counties, as well as indoor coverage for key buildings. The Company was also the world’s first to achieve 2.7Gbps peak network speed. The co-build and co-share of 5G network led to around RMB60 billion of CAPEX savings for both companies during the year, as well as significant OPEX savings such as power, tower rental, maintenance and repair, among others.

In 2021, the Company’s 5G CAPEX budget is RMB39.7 billion and 700 thousand 5G base stations are planned to be in use by year-end, with coverage extending to all counties and some developed towns. Networking will be demand-oriented, with 3.5GHz band to be used in mid-to-high traffic areas and 2.1GHz band in counties and developed towns. 5G customised networks will also be deployed. The Company will proactively promote industry-wide co-building and co-sharing in rural areas, railways and highways, to further enhance investment efficiency and benefits.
For the first quarter of 2021, wireline service revenues of the Company amounted to RMB51,661 million, representing an increase of 9.1% over the same period of last year. Revenues from wireline broadband access amounted to RMB18,915 million, representing an increase of 9.8% over the same period of last year. Broadband access ARPU amounted to RMB39.4, representing an increase of 4.8% over the same period of last year.
For the first quarter of 2021, the Company continuously promoted the integration and upgrade of family informatisation services, achieving enhancement of the overall value of Smart Family. Revenue from Smart Family maintained rapid growth and its value contribution became increasingly prominent. Broadband blended ARPU amounted to RMB46.3, representing an increase of 6.9% over the same period of last year.
For the first quarter of 2021, the Company strengthened informatisation expansion capabilities as well as operational vitality in government and enterprise market. Revenues from Industrial Digitalisation grew rapidly and reached RMB23,872 million, representing an increase of 13.4% over the same period of last year and maintaining the industry-leading position in terms of revenue size and market share.
Taking shareholders’ returns into full consideration, alongside the Company’s profitability, cash flow level and capital needs for its future development, the Board of Directors has decided to recommend at the 2020 Annual General Meeting that a final dividend equivalent to HK$0.125 per share for the year 2020 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 Company continued to optimise investment structure to focus on new development drivers. CAPEX in 2020 was RMB84.8 billion. Of which, 5G CAPEX was RMB39.2 billion. CAPEX in 2021 is budgeted at RMB87.0 billion, a minor increase of 2.6% from 2020. Of which, 5G CAPEX budget is RMB39.7 billion.

In 2021, the Company’s investment focuses on 5G, yet with strong commitment to co-build and co-share, the CAPEX size is basically flat versus last year. Meanwhile, the Company proactively commenced 4G network co-building and co-sharing, in a bid to further enhance network coverage, save CAPEX and operating and maintenance expenses, hence 4G investment decreased significantly by 83.3%. The investment of the Company’s booming Industrial Digitalisation business increased by 67% yoy, with planned addition of 52 thousand IDC cabinets and 100 thousand cloud servers.
The Company adhered to the strategic direction of “Cloud central, Network around, Network adaptive to cloud, Cloud and network as one”, and sped up the construction of new infrastructure based on cloud-network integration. The Company continued to promote 5G network co-building and co-sharing. The number of 5G base stations in use exceeded 380,000. The Company also took a global lead in achieving scale commercialisation of 5G SA network, and launched customised 5G networks including “Wide-area”, “Adjacent” and “Wingspan”. At the same time, the Company conducted 4G network co-sharing and activated approximately 170,000 co-shared 4G base stations throughout the year, which further optimised the network coverage, as well as achieved savings in investment and operations and maintenance costs. In line with the overall “2+4+31+X+O” deployment, the Company accelerated the construction of e-Surfing Cloud and IDC, with the number of cloud resource pools exceeding 100 and the number of IDC cabinets exceeding 420,000. Of which, about 80% of cabinets were deployed in the four major regions, namely Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macau, and Shaanxi-Sichuan-Chongqing. Leveraging its massive amount of exchange buildings at the edge, the Company commenced the development of multi-access edge computing (MEC) and forged capabilities of cloud-edge coordination. The Company pushed forward the upgrade of its Gigabit fibre broadband network in 280 cities and completed the construction of five major regional ROADM transmission backbone network with nationwide coverage, while expanding the coverage of its superior OTN network for government and enterprise customers. Revenue from Overall Cloud services reached RMB13.8 billion, representing an increase of 58.4% over last year, with the Company continuing to rank at forefront in terms of the market share in public cloud in China.
The Company pushed forward its R&D system reforms and stimulated vitality for sci-tech innovation. Focusing on its technological development objectives, the Company increased its investment in R&D, elevated the input and output efficiency of R&D resources, and strengthened its R&D teams in key areas such as cloud-network integration and security. The Company strengthened its own problem-tackling efforts for core technologies, and reinforced its challenge-confronting efforts for core technologies in key areas such as 5G, cloud-network integration as well as network and information security. The Company conducted proprietary R&D of e-Surfing Cloud 3.0 and mastered 20 core technologies, including platform-as-a-service (PaaS). The Company commenced scale commercialisation of e-Surfing Cloud content delivery networks (CDN) and distributed storage systems. As a result, the Company’s competitiveness in cloud computing market was effectively elevated. The Company’s e-Surfing Cloud PaaS platform has been widely adopted by internal and external customers, providing stable hosting for hundreds of millions of customers, while CDN is serving a number of top Internet customers. The Company conducted proprietary R&D for MEC platform and launched trial projects for top vertical-industry customers. Through the gradual deployment of equipment such as frequency-shifting MIMO indoor distribution systems, expandable small cells and lightweight UPF, the cost for 5G network construction was effectively reduced. During the year, the Company completed 40 global standardisation projects and filed 882 new patents. In GSMA, the Company led and organised global industry chain in the development and release of “5G SA Implementation Guidelines”. The Company also continued to optimise the planning of its sci-tech innovation and collaborated with partners from the ecosystem to carry out cooperative innovation among industry, academia and R&D institutes in the fields of quantum communications and network security. The Company also has strategic cooperation with universities and research institutes to jointly promote research in key technologies and application innovation.
In 2021, entering the new stage of its development, the Company will insist on new development philosophy and establish new development pattern. Seizing the opportunities brought by the robust development of digital economy as well as the accelerated digital transformation of the society, the Company will comprehensively and deeply promote “Cloudification and Digital Transformation” strategy. The Company will continue to deepen reforms, commence the initial public offering and listing of shares in the domestic capital market, innovate systems and mechanisms, enhance corporate and employees’ vitality, expand ecological cooperation and enhance its sustainable development capabilities. The Company will strengthen sci-tech innovation centred around problem-tackling of core technologies and accelerate the integration of 5G, cloud and AI to develop new information infrastructure. The Company will also stimulate the ever-migrating and evolving demands from the society for informatisation under converged scenarios, continue to build its digitalised platform, and proactively empower internal and external digital transformation. The Company will also proactively shoulder its social responsibility to promote rural revitalisation, and facilitate the construction of Cyberpower, digital China and smart society. The Company will share the results of its high-quality development with shareholders and customers and continue to create value for the society.

Last updated on 13 May 2021

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