"China's economy is on the road to recovery, following the easing of Covid-19 restrictions from late 2022," the GSMA, an organization that presents the interests of mobile operators worldwide, said in its latest report on the state of China's mobile economy. "Mobile connectivity served as a lifeline throughout the pandemic and will play an even more crucial role in enabling the safe return to social interaction and the restart of many economic activities."
The report, which is available in English and Chinese, notes that "authorities across China have outlined plans to integrate digital technologies, underpinned by advanced mobile connectivity, into every aspect of society to sustain China's competitiveness in an evolving global economy. In 2022, mobile technologies and services generated 5.5% of China's GDP – a contribution that amounted to $1.1 trillion of economic value added."
The UK-based organization adds that "5G will underpin future mobile innovation and services, building on current deployments and adoption." What is more, "The number of 5G base stations in China exceeded 2.3 million at the end of 2022, including approximately 887,000 built during the year. China will be the first market with 1 billion 5G connections, reaching the milestone by 2025. The report also says that "By 2030, 5G connections in China will reach 1.6 billion, accounting for nearly a third of the global total. The technology will add $290 billion to the Chinese economy in 2030, with benefits spread across industries."
Additional key highlights from the report include:
- 5G enterprise services to see greater commercial scale in 2023: "Mainland China is the largest 5G market in the world, accounting for more than 60% of global 5G connections at the end of 2022. With strong take-up of 5G among consumers, the focus of operators is now increasingly shifting to 5G for enterprises. This offers opportunities to grow revenues beyond connectivity in adjacent areas such as cloud services – a segment where operators in China have recently made significant progress."
- Dedicated networks on the rise: "Private and dedicated wireless network solutions are back in vogue, as 5G’s enhanced capabilities move deployments beyond low-profile, niche offerings. Manufacturing and mining are two sectors where demand for private and dedicated 5G networks in China looks particularly strong."
- Innovation underpins China's digital ambitions: "China's digital ambitions are driven by a combination of external and internal factors, notably a slowdown in growth of the real economy. The digital ecosystem, including start-ups, will be at the forefront of efforts to realize China's digital ambitions, with innovation and investments driving the creation of new solutions across the focus areas of China's 14th Five-Year Plan (2021–2025) and the Long-Range Objectives Through the Year 2035."
- The mobile industry shifts towards circularity: "Across the telecoms ecosystem, sustainability has extended beyond corporate social responsibility (CSR) to become a core strategic priority. Industry players are increasingly adopting a model of production, service offering and consumption that involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products for as long as possible."
- Fintech presents opportunities for mobile industry players: "China has developed a lead in fintech services over the past decade, driven by investments in an expanding portfolio of products and surging public demand for electronic payment options. As fintech innovators increasingly leverage emerging technologies (such as big data, AI and cloud computing) to enable more complex and customized solutions, operators have an opportunity to play a greater role in fintech."
The report also reveals the following statistics:
- Unique mobile subscribers in China will total 1.33 billion by 2030;
- There were 1.17 billion mobile internet subscribers in China in 2022, equivalent to 79% adoption;
- 5G will overtake 4G in 2024 to become the dominant mobile technology in China;
- China to be among leading 5G markets globally, with 88% adoption by 2030;
- Smartphone connections will total 1.73 billion in China by 2030, accounting for 93% of connections;
- Smartphone data traffic in China to more than double over the period to 2028;
- Licensed cellular IoT connections in China to double to 3.6 billion by 2030;
- Revenue growth is set to moderate in China over the coming years as 5G adoption reaches maturity;
- Operators in China will spend $291 billion on their networks during 2023–2030, with most on 5G;
- The mobile sector added $1.1 trillion of economic value to the Chinese economy in 2022;
- At the end of the decade, mobile's economic contribution will reach $1.3 trillion;
- The mobile ecosystem in China supported 6 million jobs in 2022;
- The fiscal contribution of the mobile ecosystem reached $110 billion in 2022;
- 5G will add almost $290 billion to the economy in China in 2030; and
- Manufacturing and services will benefit the most from 5G in 2030.
Regarding the sixth generation mobile system standard (6G), the GSMA points out that "The mobile industry is already studying how 6G will shape the future of mobile. For regulators, ministries, operators, vendors and researchers, spectrum policy for 6G is becoming increasingly important." Furthermore, "2023 marks the beginning of a long journey as new studies begin when the WRC-27 cycle kicks off."
The report concludes by explaining how "6G is expected to become the primary mobile technology in the 2030s and will offer an enhanced user experience over previous generations. It promises ultra-fast data rates with lower latency, significant energy efficiency improvements and greater reliability."
What opportunities are you seeing in China's mobile sector?
Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.