MOBILE NETWORKS

As China shifts gear, China Mobile boss sees IT-driven consumption hitting 3.4 trillion yuan in 2015

PUBLISHED : Wednesday, 15 July, 2015, 4:52pm
UPDATED : Wednesday, 15 July, 2015, 5:26pm

Chinese Premier Li Keqiang’s ambitious “Internet Plus” campaign will prove instrumental in creating more money and jobs in the world’s No.2 economy, a Chinese telecom industry leader said this week.

IT-driven consumption in China could reach 3.4 trillion yuan (US$547.64 billion) this year, said China Mobile chairman Xi Guohua, citing his own research. 

“This means brand new opportunities for growth,” said Xi. 

“It also means a lot of new job opportunities, for example, those who open shops on Taobao,” he added, referring to the consumer-to-consumer online store operated by Alibaba, China’s top e-commerce firm.

Xi, who heads up the world’s largest mobile network operator by subscribers, was speaking at the GSMA Mobile World Congress Shanghai on Wednesday. 

Attendees at this closely watched industry event include representatives from many leading global telecom players and industry analysts.

“Internet Plus” has become central to Li’s economic policy as China’s economic growth is in its worst shape in over a decade. Compounding the problem, the premier has had to contend with the worst domestic stock market crisis in years since late last month. 

Li wants to connect traditional sectors such as manufacturing and property with advanced internet technology so he can speed up economic restructuring to avoid a hard landing.

Job creation and growth remains a top challenge for President Xi Jinping and his underlings. 

Fresh university graduates in China have been complaining of difficulties in finding well-paid jobs for years, a trend that threatens to trigger social unrest, something the Communist Party is keen to avoid.

China Mobile’s Xi is optimistic as he anticipates rapid growth in mobile data traffic for years to come. This could translate into various business opportunities in online shopping and logistics support, he said.

Mobile data traffic could jump 300-fold in China by 2025 in line with growing demand for smartphones, tablets and wearable devices, he added.

READ MORE: China Mobile to partner with other APAC telecoms giants as they pursue region's 1.8 bln subscribers

Users of 3G and 4G smartphones in China are on pace to make up two-thirds of the country's mobile connections by the end of this year, according to a new industry study. 

Smartphones will account for 913 million, or 68 per cent, of the estimated 1.3 billion mobile connections in the world's second-largest economy by the end of this year, industry association GSMA announced earlier this week.

“We want to take the lead in 4G network development on the world stage,” said Xi at the ongoing trade fair. 

“The faster the network is, the more traffic users will use.”

Meanwhile, China Mobile, one of the country’s big three state-owned mobile network operators, is facing a tough road ahead as voice services and calls have been winding down by up to 20 per cent a year, he said.

“This means we must accelerate our industry transformation and focus on more promising sectors.”

He said the Chinese carrier will focus more on data services and its current and future capital investments as it mulls how to best invest in the logistics field. 

The company is already a major shareholder in Shanghai Pudong Development Bank, an important bluechip company listed on the Shanghai bourse.