Bullish statement comes amidst Chinese telecom giant nearing 200 million 4G subscribers.
China Mobile (NYSE:CHL), the leading Chinese telecom industry leader, says that the ambitious drive for “Internet Plus” campaign will prove to be instrumental in creating jobs and wealth for the world’s second largest economy. According to chairman, Xi Guohua, IT driven consumption is likely to reach around less than $550 billion.
Li Keqiang, Chinese Premier, stated that he wants to associate the traditional sector, such as agriculture, manufacturing, and property, with growing advanced technology that can help to restructure the economy, which the Chinese leadership is undertaking without having to go for a hard landing. Economic growth and job creation are seen as top challenge for President Xi Jinping and his subordinates.
As more Chinese get education, whether at home or abroad, graduates are complaining about difficulties in obtaining high paying jobs. This trend will prove to be a threat for the Chinese Communist Party, but Xi sees a positive aspect in this, as he plans to turn this into an opportunity for rapid progress in China Mobile, which could translate into several opportunities, ranging from online shopping to logistics support.
Mobile data traffic is likely to grow 300-fold in China by the mid 2020's in line with increasing demand for wearable devices, smartphones, and tablets. Smartphone users are expected to be numbered at more than 913 million, or less than 70%, out of the total estimated 1.5 billion mobile connections.
Similarly, 4G connections have reportedly breached past 190 million users, and is set to be on track to reach its 200th million customer by the end of this year. In fact, according to a new industry research report, users of 3G and 4G smartphones in China are on track to constitute about two-thirds of the nation’s mobile connections before the current year closes.
At a current rate of 25% penetration rate, there still is more room for growth. China Mobile is investing big in the area of 4G, with almost less than a million 4G nodes, which account for over 40% of all nodes in the whole of this planet. This is likely to generate stronger revenues, as ARPU for 4G users is about 1.5 times as compared to an average user.
Mr. Li said that in addition to the 4G, the company is also gearing itself up for researching 5G, though that is a long way ahead, and not likely to hit the commercial arena till the next decade.
China Mobile’s stock price ended the day at $62.28, a gain of 0.65% the previous day.
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