As we look back on some of the top Asia stories of 2024, Huawei returned to top form, 5G floundered and M&A flourished in Asia while telcos took diverse AI paths.
The big vendor put the worst of US-imposed restrictions behind it as its device and cloud divisions powered growth.
Huawei emphatically returned to growth, posting its best result in four years and gaining ground in its device, cloud and auto segments.
It posted strong earnings results, including a full-year profit of $12 billion with a fourfold boost in operating cash flow, while first-half sales grew 34%. Its cloud business is targeting 30% growth in 2024 and $36 billion in sales in 2025.
The company also turned around loss-making smart auto business Yinwang, selling off a stake to EV firm Avatr in a deal that valued it at $16 billion.
Huawei also released HarmonyNext OS, its first device operating system totally independent of Android, and it is now installed on more than 900 million devices.
But it continues to face headwinds due to US sanctions. The Kirin 9020 chip that powers the new Mate 70 flagship phone is only a modest advance on the previous chip, raising questions about its ability to compete at the top end of the device market.
The limitations and lack of uplift from the mobile standard were laid bare.
It was the year when 5G's lackluster growth became impossible to ignore. On the vendor side was the collapse in RAN and mobile core spending and the indifference to 5G-Advanced.
On the operator side, aside from stagnating ARPUs, is the cumulative evidence of a long-term decline in mobile data demand. The latest Ericsson mobility report reveals that global mobile traffic grew 21% in Q3, compared to 25% growth in 2023, 40% in 2021 and 95% in 2018.
Global mobile adoption is also in retreat, though it's not clear why. Around 160 million people joined the mobile Internet in 2022 and 2023, down 20% from the previous six years.
Against this gloomy outlook, growing demand for private 5G may be a cause for optimism. One analyst firm predicts the sector could grow at 20% annually and account for a fifth of all 5G investments by 2030.
From LLMs to AIDCs, operators adopted diverse AI strategies.
Asian telcos took different paths in the great AI race.
China Telecom was one of those that built out its own LLM. Its Xingchen model was nominated as the preferred LLM for China's giant SOEs.
Others, like Singtel and SoftBank, joined SK Telecom's Global Telco AI Alliance, aiming to create telecom-specific AI models.
SoftBank, KDDI and Singtel were also among the telcos that began building supersized AI data centers. So have China's big three telcos, but the market already appears to be over-served, with data centers running below capacity.
Drawing on its partnership with Nvidia, SoftBank is planning the world's first AI-RAN, while KT and Telstra signed separate AI partnerships with Microsoft.
KT agreed to set up an AI and cloud innovation center and use Microsoft's cloud services. Telstra signed Microsoft as an initial customer on its new high-speed fiber network, buying 21,000 Copilot licenses in return.
Asian telcos continued to find ways to extract value from their assets.
It was yet another active year in Asian M&A, ending with the biggest transaction – a $6.5 billion merger between the two smallest Indonesian operators, XL Axiata and Smartfren.
The year began with perhaps the most surprising deal – KDDI’s $3.3 billion acquisition of a controlling stake in convenience store chain Lawson.
Telcos continued to maximize the value of their passive network assets. Rakuten Mobile struck a ten-year sale and leaseback deal worth $2 billion for some network assets, while New Zealand's Spark has just agreed a $181 million tower sale.
TPG Telecom, meanwhile, offloaded its fiber network and enterprise business to Vocus for $3.5 billion.
In June, HKT sold a 40% stake in its fixed-line network to a Chinese state-owned financial firm – a sign of Hong Kong's closer integration with the mainland Chinese economy.
Similarly, China Mobile has just filed an offer of $882 million for fixed operator HKBN. If successful, it would become Hong Kong's biggest fiber player and the number one mobile provider. However, it may first have to overcome a challenge from the private equity firm I Squared.
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