New Revenues Lift China Telecom

China Telecom reported a 2.1% increase in revenue for 2015 to 331 billion Chinese yuan (51 billion US dollars), fuelled by a 20% increase in "emerging business" revenue to 101 billion yuan. China Telecom categories emerging businesses as "data traffic operation, IT and Internet applications".

In revenue terms, China Telecom is about half the size of rival China Mobile, but it has been spending an extraordinary 33% of revenue on capex as it rolls out 4G and fibre networks (compared with 29% for China Mobile). In 2016, China Telecom plans to reduce capital spending by 11% to 97 billion yuan. source: China Telecom presentation

China Mobile Signals Spending Slowdown

China Mobile reported a 2.6% increase in revenues for 2015 to 668 billion Chinese yuan (103 billion US dollars), driven in part by rising usage of its expanding 4G network. However, telecoms service revenues slipped 1%, as voice and SMS traffic continued to decline.

Claiming to be the largest 4G operator in the world, China Mobile said it had 312 million 4G customers at the end of 2015, up from 90 million at the end of 2014. The telco plans to cut capex to 186 billion yuan in 2016, down from 196 billion yuan in 2015. Source: China Mobile statement

Performance-Related Advertising Lifts Tencent

Chinese Internet group Tencent reported a 30% increase in revenues for 2015 to 102.86 billion Chinese yuan (15.84 billion US dollars). In the fourth quarter, revenues were up 45% year-on-year, boosted by a 118% rise in online advertising revenues to 5.7 billion yuan. Tencent said that performance-based advertising revenues increased by 157% to 2.92 billion yuan, "mainly reflecting revenue growth from Mobile Qzone and Weixin Official Accounts, as well as contributions from newly launched advertising service on Weixin Moments."

Tencent added that the combined monthly active users of the Weixin and WeChat messaging services reached 697 million at the end of 2015, representing annual growth of 39%. "Official Accounts became a leading platform connecting users to content creators, merchants and advertisers," it added. "Weixin Pay also became increasingly popular. The volume of red envelopes exchanged via Weixin Pay exceeded 32 billion within six days during the Lunar New Year holidays in early 2016, growing by 9 times year-on-year." source: Tencent statement

For more on Weixin/WeChat and the rise of conversational commerce, see my recent report for STL Partners.

LTE Infrastructure Market Peaks

The global macrocell mobile infrastructure market grew 3% year-on-year in the fourth quarter of 2015 to 13 billion US dollars, fuelled by LTE rollouts in China and India, according to IHS Technology. But the LTE market will begin to decline this year, as Chinese and European telcos complete their LTE deployments, the research firm said. 

Ericsson led the global wireless infrastructure market for 2G, 3G and 4G gear in 2015, according to IHS, followed by Huawei, Nokia Networks, ZTE and Alcatel-Lucent. The worldwide macrocell infrastructure market was worth 48 billion dollars last year, the research firm added. source: FierceWireless article

The US Leads Race to Connect the Car

Source: Statista

MTN Heralds Mobile Commerce Growth

MTN said its mobile money customer base increased by 56% in 2015 to 34.7 million across 15 countries. The Pan-Africa and Middle East telecoms group added: "In the year, the focus was on the migration of the MTN Mobile Money platform to a more agile platform enabling converged campaigns and incentives, establishing dedicated functions across operations and providing niche services where MTN has a competitive advantage. MTN Mobile Money revenue increased by 55.8% and it now accounts for 16.8% of Uganda’s total revenue and 6% and 6.2% of each of Ghana and Rwanda’s total revenues respectively."

MTN also said AIH and MEIH, its e-commerce joint ventures, now offer a range of Internet services including e-commerce retailing, as well as market place, taxi, travel, classified and food delivery services. "AIH has 10 company verticals in over 23 countries in Africa that are market leaders and recorded approximately 2.3 million customers and 4.4 million transactions in the year.," MTN said. "Jumia is now the #1 online shopping mall in 12 markets in Africa while Lamudi is the #1 real estate classified in 21 countries across Africa. In addition, MEIH has seven company verticals including Wadi, an online shopping retailer delivering a premium online shopping experience in the Middle East."

MTN also claimed to have become the largest distributor of music in Africa and to have more than 800 companies providing 5,500 content services under the lifestyle offering. source: MTN statement