China's fast-tracked 5G rollout has lifted China Tower's full-year earnings 6.4 billion yuan (US$984.6 million), up 23.1%.
The state-owned infrastructure firm boosted revenue 6.1% to 81.1 billion yuan ($12.4 billion), driven by the acceleration of the nationwide 5G deployment, with strong gains in all of its emerging business segments, the company reported Monday.
The core tower business grew rent and services income just 2.8% to 73.4 billion yuan ($11.3 billion). While it recorded a promising surge in small cell revenue, up 19.3% to 785 million yuan ($120.3 million), its share of total sales was down two points to 91%.
The unit had 2.02 million tower sites under management at year-end, up 29,000 for the year, with an additional 12,000 tenants at 3.175 million.
On the up
The distributed antenna systems unit, which provides indoor sites for subways, commercial buildings, airports and other public venues, reported 32.7% higher sales at 3.53 billion yuan ($541 million).
The solutions and applications unit posted a 59% spike in revenue to 3 billion yuan ($460 million). The unit offers monitoring and video surveillance services to verticals including environmental protection, resources management and security.
The new energy business, which provides battery exchange and power backup services, increased revenue almost five-fold to 935 million yuan ($143.3 million).
Besides the revenue growth, the company also cut some construction and maintenance costs and drove down net finance costs by nearly 15%, or around 700 million yuan ($107.3 million).
Chief accountant Gao Chunlei told an earnings call that 2020 capex of 37.12 billion yuan ($5.7 billion) had been higher than expectations, up from 27.1 billion ($4.2 billion) in 2019, primarily as a result of new site constructions.
Because of higher capex, free cash flow was down 10.5% to 20.4 billion yuan ($3.1 billion), he said.
He said 2021 capital expenditure would likely be around 30 billion yuan ($4.6 billion), of which 18.4 billion yuan ($2.8 billion) would be allocated to 5G.
Chairman Tong Jilu said that to meet the demands of the accelerated 5G network deployment and the scaling-up of construction, the company had brought forward the deployment of new coverage solutions and new 5G features.
Looking ahead, he said China Tower would seek to develop "new products and new applications in areas such as DAS sharing, 5G power access solutions, tower models and masts application, tower monitoring, edge computing [and] intelligent battery monitoring."
He said the company anticipated stable revenue growth in 2021.
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— Robert Clark, contributing editor, special to Light Reading