China Mobile (NYSE: CHL; SEHK: 941) the worlds’ largest mobile carrier, saw its largest single-month subscriber loss in February 2020, due to a combination of factors including the COVID-19 outbreak, a mobile number portability program introduced late last year, and a plateaued mobile market.
In February, China Mobile lost 7 million subscribers, after losing 862,000 customers in January, according to a document on the company’s official website.
Although the decrease accounts for less than 1% of its massive 942 million user base, it is the carrier’s first decline in its 23-year-history.
Wang Jianzhou, CEO of China Mobile, said at a press conference that the unprecedented customer loss could be partially attributed to those dual SIM card users giving up on one service during the lockdown period to save on their phone bills. And the massive shuttering of retail shops in the first two months of this year could be another reason barred the carriers from adding new customers, as Han Xia, director of the Ministry of Industry and Information Technology told media.
China Mobile isn’t the only carrier seeing a plunge in users. China Unicom, and China Telecom, the other two of the three state-run carriers, also lost 6.6 million, and 5.6 million users, respectively, in February.
Since November 2019, under the new mobile number portability program, mobile subscribers in China can switch carrier and retain their mobile numbers. Many China Mobile customers thus turned to other carriers, as competition intensified.
Furthermore, a saturating 4G market also bottlenecked Chinese carriers’ user growth, according to the latest report by China International Capital Corporation (CICC). “Facing rising growth pressure at end of 4G era…we estimate this trend would continue in 2020 as 4G starts to shrink,” CICC analyzed.
Over the past few years, China Mobile and other carriers have been betting on the development of 5G, by hastening 5G network construction and promoting commercial 5G packages, to boost the mobile market.
The three carriers are expected to set up 550,000 5G base stations by the end of 2020, KrASIA reported.
China Mobile now serves more than 15 million 5G users, while China Telecom has another 10 million 5G subscribers. China Unicom hasn’t disclosed its number of 5G users.
However, “5G may not be the cure in the early stage”, CICC pointed out in its report. “China Mobile plans to develop 100 million 5G subscribers in 2020, which we believe will mainly come from the migration of its current subs. ”