China Mobile Sees NB-IoT Boom as Profits Rise

China Mobile reported a dramatic surge in the number of IoT connections on its network, and said it had added another 190,000 4G basestations in the first half of the year, as it recorded growth in sales and profits.

The Chinese operator has pioneered the rollout of NB-IoT, a technology for connecting smart meters and similar objects, and revealed it now supports more than 384 million overall IoT (Internet of Things) connections, up sharply from 151 million in June last year.

While the operator does not indicate how many of these connections use NB-IoT, it is building out a nationwide NB-IoT network and targeting "continuous coverage to areas at town level" by the end of this year.

The national NB-IoT push is not surprising given the heavy involvement of Chinese equipment giant Huawei Technologies Co. Ltd. in the development of the standard. But the sharp increase in connections could fuel adoption in other parts of the world by helping to lower chipset costs. (See Ericsson Massively Ups Cellular IoT Forecast.)

That could spell trouble for rival technologies such as Sigfox and LoRa, which use unlicensed spectrum and have previously appeared to enjoy a major cost advantage over the cellular standard. (See Sigfox Loses CFO Martineau – Sources.)

Major service providers like Deutsche Telekom AG (NYSE: DT) and Vodafone Group plc (NYSE: VOD) have also thrown their weight behind NB-IoT and will have a close eye on the Chinese market to see how business is developing. (See DT, Vodafone Complete NB-IoT Roaming Trial.)

China Mobile Communications Corp. did not break out revenues from its IoT services but said they were up 47.6% in the first six months, compared with the year-earlier period. The more substantial rise in the number of connections points to a drop of more than 40% in revenues per device.

Overall revenues at the Chinese operator edged up 0.8%, to 391.8 billion Chinese yuan ($57.5 billion), while profits rose 4.7%, to RMB65.6 billion ($9.6 billion). China Mobile said it would pay an interim dividend of HK$1.826 ($0.23) per share.

Want to know more about 5G? Check out our dedicated 5G content channel here on
Light Reading.

Despite concern about a slowdown in the country's mobile market, the operator finished June with 906 million mobile customers, 39 million more than in June last year. Around 677 million of those customers now use 4G services, up from 594 million a year earlier.

Customer growth has offset a decline in average revenue per user (ARPU), which fell 6.6%, to RMB58.1 ($8.5), compared with the year-earlier half, as services were taken up by late adopters in less affluent areas.

However, China Mobile also enjoyed an increase in broadband subscribers, with customer numbers rising to 128.2 million from 90.2 million in June 2017. Broadband ARPU was up 7.3%, to RMB34.8 ($5.1).

The operator said it had been making investments to bolster network capacity and maintain a "competitive edge." That included the rollout of another 190,000 4G basestations in the first six months.

China Mobile also said it would continue to work on 5G trials and look into the possibility of "cross-industry integration and applications that will speed up the commercialization of 5G technology."

The operator previously announced plans for trials of "standalone" 5G technology this year in cities including Shanghai and Hangzhou. Unlike the "non-standalone" variant, which relies heavily on existing 4G infrastructure, standalone technology would come with an entirely new 5G core. (See China Mobile Confirms Aggressive 5G Standalone Plan.)

A standalone rollout is therefore likely to prove somewhat costlier, although Chinese operators have addressed some investment concerns after pooling infrastructure assets in China Tower, which has spent $17.7 billion on site investments since 2015, according to Deloitte.

The consulting company earlier this week said the US had fallen behind China in preparations for the launch of 5G services, citing China's lead in the number of mobile sites that could eventually support 5G technology. (See America Is Losing the 5G Race, Says Deloitte.)

However, Guang Yang, a senior analyst at Strategy Analytics, has previously indicated that operators using standalone technology will require many more cell sites than telcos deploying the non-standalone version.

— Iain Morris, International Editor, Light Reading

Be the first to post a comment regarding this story.
Sign In