China's telecom growth to dip to single digits

PUBLISHED : Tuesday, 21 January, 2003, 12:00am
UPDATED : Tuesday, 21 January, 2003, 12:00am

China's Ministry of Information Industry (MII) has for the first time projected telecommunications revenue to grow by less than 10 per cent for this year.

Minister Wu Jichuan on Monday laid out the target of a 9.5 per cent growth in telecom revenue to 451 billion yuan (about HK$424.93 billion) for the full year, against a 14.41 per cent increase last year.

The net increases in both fixed-line and cellular subscriber numbers are expected to slow for the first time. Mr Wu expects China to add 33 million new fixed-line users this year, compared with 34.05 million last year.

Mobile subscriber growth is expected to register a bigger slowdown, with 52 million new users to be gained this year, according to the MII.

Last year, China added 61.39 million new mobile users to bring the total to 214.41 million.

Mr Wu announced the renewed projections at the MII's national conference.

The MII forecasts imply a tougher year ahead for China's six network operators.

Based on the MII's forecasts, China's mobile telephone users would surpass fixed-line users by a thin margin by the end of the year. China's fixed-line users are expected to number about 250 million.

Last year, China's telecom sector experienced a slowdown, especially in the second half.

According to the MII, the country's telephone users increased 30 per cent, to 421.03 million, compared with 41.1 per cent growth in 2001.

Of the total, 214.42 million were fixed-line users, while the remaining 206.62 million were mobile subscribers.

Both fixed and wireless services registered a slowdown in growth, although the absolute net addition figures were maintained.

The fixed-line growth rate slowed to 19 per cent, compared with 24.1 per cent in 2001. The mobile growth rate plunged to 42.4 per cent, against a 69.8 per cent increase in 2001.

Total revenue recorded by China's six telecom carriers was 411.58 billion yuan, an increase of 14.41 per cent, compared with 15 per cent in 2001. The slower revenue growth also saw telecoms carriers spend 20.08 per cent less on investment in fixed assets last year. They spent a total of 203.46 billion yuan.