According to Fitch Ratings in 2017 Outlook report, the increase in 4G consumption, a lower increase in tower-leasing expense, and the further decline in capex are likely to bolster China Mobile Limited and China Telecom Corporation Limited. The mobile average revenue per user (ARPU) for both the companies will increase in 2017 due to these cited reasons.
“The 4G ARPU was 31%-73% higher than blended ARPU in 1H16,” report stated.
The telecom tower sharing is increasing and this will benefit the companies. The towers’ usage fees will get greatly reduced that the leasing cost comes much lower. China Telecom Corporation Limited will also profit from the 800MHz re-farm as this enables the same network coverage with fewer base stations. China Telecom’s 4G coverage is expected to be completed by the end of 2016.
In terms of Capex decline, Fitch predicts a 10% drop in 2017. “The Capex decline is likely to remain a recurring theme in 2017, as the peak of the 4G capex cycle has passed,” report pointed out.
“China Telecom has formed an alliance with China Unicom (Hong Kong) Limited on network-sharing should continue to save capex. We also expect a modest cut in China Mobile Limited’s Capex,” the report said.
Ria Lakshman. V is a lead news writer at The Telecom Times. She studied Journalism at Manipal School of Communication and proceeded to work in newspapers and magazines, with technology as her focus area. Passionate about Telecommunications sector, her move to 'The Telecom Times' was a natural choice. Alongside, she also writes for Telecom Talk, where she covers news and tech commentaries in the sector of telecom. In the free time, Ria loves to go camping, read books, or sketch illustrations. She also runs a local design studio and promotes eco-friendly crafts. Ria can be found sharing her knowledge and insights on Twitter.