Business Review

During 2023, we fully implemented our “1-2-2-5” strategy, continuously increased our ability to provide information services and fueled our engine for innovation and development. We steadfastly placed customers at the center of our business, further consolidated our fundamental competencies, continuously developed our scale-based and value-oriented operations in greater depth, robustly drove the comprehensive and integrated development of our CHBN markets and continued to enhance product competitiveness and service quality. Thanks to these efforts, we achieved favorable growth in our overall business and continued to increase customer satisfaction. Our operating revenue amounted to RMB1,009.3 billion. Of which, revenue from telecommunications services was RMB863.5 billion, representing an increase of 6.3% year-on-year.

Key Operating Data
2022 2023 Change %
Mobile Business
Customer Base (million) 975 991 1.6
Of which: 5G Package Customer Base (million) 614 795 29.4
Net Additional Customers (million) 18.11 15.99 –11.7
Of which: Net Additional 5G Package Customers (million) 227 180 –20.6
Average Minutes of Usage per User per Month (MOU) (minutes/user/month) 256 242 –5.5
Average Handset Data Traffic per User per Month (DOU) (GB/user/month) 14.1 15.9 12.7
Average Revenue per User per Month (ARPU) (RMB/user/month) 49.0 49.3 0.6
Broadband Business
Wireline Broadband Customer Base (million) 272 298 9.6
Of which: Household Broadband Customer Base (million) 244 264 8.3
Wireline Broadband ARPU (RMB/user/month) 34.1 34.5 1.2
Household Customer Blended ARPU (RMB/user/month) 42.1 43.1 2.4
Corporate Business
Corporate Customer Base (million) 23.20 28.37 22.3
IoT Card Customer Base (million) 1,062 1,316 23.9
“Customer” Market

Centered around 5G, we better integrated data access, applications and customer benefits to effectively meet diverse customers’ demands for a rich and convenient digital life. We built and continued to upgrade our customer management system covering acquisition, retention, value upgrade, attrition control and win-back, enhancing the retention of existing customers and maintaining value contribution from mid – to high-end customers. We stepped up efforts to accelerate 5G universal adoption and the popularization of 5G devices, and comprehensively enhanced 5G network residency. Moreover, we pursued innovative methods for integrated customer operations and implemented a more sophisticated approach to customer segmentation, seamlessly integrating it into our operations. These initiatives have resulted in a broader customer base, enhanced customer loyalty and increased customer value. Additionally, we have offered more differentiated services through our customer brands of GoTone, M-zone and Easy Own, and we were also able to better leverage scale advantage to aggregate consumption to build the largest digital life services platform in China. The rapid growth in customer scale, coupled with our enhanced integrated operations, has helped our 5G business gain favorable momentum. As of the end of December 2023, our 5G network customer base reached 465 million and its share of our overall customer base increased to an industry-leading 46.9%. We gained a net addition of 138 million customers, or a monthly average net addition of more than 11.47 million. The ARPU and DOU of our 5G network customers reached RMB78.2 and 25.0 gigabytes respectively, driving stable and healthy growth in overall mobile ARPU.

“Home” Market

Focusing on smart home, we steadfastly pursued the direction of scale expansion, brand recognition, ecosystem building and value enhancement in the development of the “Home” market and accelerated household digital intelligence transformation. We continued to consolidate the foundation for our family information services and accelerate the upgrade of household broadband network towards diversified connectivity, scenario-based experience and cloud-based terminal computility. We increased the value contribution of Mobile HD through centralized big-screen operations and diversified screen types, while infusing greater innovation into vertical scenarios and adopting a digital intelligence operation. We consistently upgraded our home security intelligent services, enriched value-added AI functions, and diversified terminal types through enhanced resolution and computility. Moreover, we extended application scenarios to home security surveillance and the governance of rural villages. We optimized the operation of our family services portal to realize the auto detection, auto display and auto control of devices, unleashing synergies across different scenarios. We continued to extend the living circle around the family, and accelerated the integration of health and elderly care, digitalized community, and the scenario-based governance of rural villages. As a result of these initiatives, our “Home” market achieved rapid growth in revenue and stable and healthy growth in customer value. As of the end of December 2023, the number of household broadband customers reached 264 million, with an average monthly net addition of 1.68 million, while Mobile HD customers reached 207 million, with a net addition of 14.92 million. Home network deployment, big screen, security and other key smart home businesses saw a rapid uptick in scale, while health and elderly care, full household intelligence and other new HDICT scenarios witnessed accelerated growth. Household broadband revenue grew by 13.5%, smart home value-added business revenue increased by 13.1%, and household customer blended ARPU maintained stable and healthy growth.

“Business” Market

Centering around the positioning of the “Business” market as the new driver of revenue growth and a major force for enterprise transformation and upgrade, we developed “Business” market product and solution lists with key products and sectors in mind. In doing so, we leveraged the advantages of our innovation capabilities, organizational synergy, infrastructure resource and localized services to continue improving the scale, quality and competence of this business. We strove to build a leading cloud engine that allows customers to seamlessly connect to the cloud when they access our network anywhere, from edge devices and within milliseconds. We committed to core technologies that are self-developed and under our control, ensuring our leadership in the evolution of the CN brain. We promoted the compatibility and openness of the industry ecosystem, marking a positive start in the establishment of our industry-leading China Mobile Cloud. We maintained our leading position in empowering all sectors with 5G, represented by the development of a dedicated 5G network 3.0 that can be integrated into enterprise production as a foundation for connection. Centered around the 9-One Industry Platform and our high-value applications, we developed a 4-in-1 solution that integrates cloud, network, platform and applications, resulting in the scale replication across multiple market segments from an initial stage of isolated adoption. We have achieved significant digital intelligence transformation in various verticals thanks to these initiatives. In 2023, we achieved leapfrog development in industry cloud, with revenue amounting to RMB70.8 billion. Our cloud computer’s full-stack capabilities were entirely self-developed and the product recorded a sales volume of over 2.70 million, representing a more than ten-fold increase year-on-year. The number of IoT card customers reached 1.316 billion, with a net addition of 254 million.

“New” Market

In terms of the international business, to support the high-quality co-construction of the “Belt and Road”, we continued to optimize the planning of our overseas information infrastructure, continuously enhancing our end-to-end service quality, expanding our “circle of friends”, and increasing the scale of our international business. During the year, revenue from the international business increased by 24.2% year-on-year to RMB20.7 billion. In terms of equity investment, we focused on securing industry leadership, improved the ecosystem, reinforced core competence through direct investment, and strengthened our foothold in leading funds to support technological innovation through a specialized, refined, differentiated and innovative approach. With a focus on key fields such as AI, Industrial Internet and Visual Internet of Things, we created a bigger “circle of relatives” to collaboratively provide information services, boosting synergy and unleashing the potential of capital. In the area of digital content, we adopted the content, technology, and integrated innovation approach to strengthen content generation, aggregation and dissemination, consistently building an industry-leading content ecosystem. In 2023, alongside fast growth in active users of MIGU Video, cloud games and video connecting tones, revenue from the content business increased by 31.6% year-on-year. The number of MIGU Video APP’s monthly active customers reached 116 million and the customer base for video connecting tones exceeded 400 million. In terms of FinTech, monthly active customers of “and-Wallet” recorded a year-on-year increase of 51.8%. The business scale of the financial services throughout the industrial chain increased 35.7% year-on-year, serving 59.6% more enterprises.

Thanks to our forward-thinking and targeted approach to investment, we were able to focus on ensuring leading connection quality, planning computility resources, and fostering and improving capabilities to lead in all aspects ranging from network coverage and quality to technology and customer experience, while also consolidating our foundation for digital intelligence, supporting growth across the CHBN markets. At the same time, we improved resource management, strengthened digital intelligence empowerment, and optimized our project management and investment structure by strengthening investment control throughout the process and adopting specialized operation and implementation measures to save energy and protect the environment. These measures have helped us ensure investment efficiency and promote low-carbon development.

We continued to enhance the capabilities and quality of our infrastructure. As of the end of December 2023, the number of our base stations had exceeded 6.60 million, making it the largest network in the world. The total length of our optical network reached 28.74 million cable kilometers while our dedicated business network and backbone transmission network boasted bandwidth of 82.8Tbps and over 859Tbps respectively. The bandwidth of CMNET, cloud dedicated network and IP dedicated network exceeded 550Tbps.

We continued to optimize our international information infrastructure. As of the end of December 2023, we had more than 80 submarine and land cable resources that enabled global coverage. Our total bandwidth for international transmission reached 145Tbps and our 235 POPs covered all major countries and regions worldwide. In addition, our international roaming and 5G services covered 264 and 75 locations respectively. Worldwide users covered by our Hand-in-Hand global partnership program exceeded 3 billion.

In 2023, our capital expenditure totaled approximately RMB180.3 billion. In 2024, we expect total capital expenditure to stand at approximately RMB173.0 billion, which will be spent primarily on areas including enhancing our leadership in connection perception, accelerating computility development, building out more intensive and effective capabilities, improving infrastructure planning and expansion, and supporting CHBN business development. Of this, capital expenditure for 5G network will amount to approximately RMB69.0 billion, which will be funded mainly from cash flow from operating activities.

Channel Transformation

We furthered innovation in our marketing and service system, improved accessibility, and built new channels that integrated shop, network and people. Firstly, we increased our efforts in turning terminals into an ecosystem, connecting the channels to form sales chains, and establishing a customer membership system. This has increased our influence throughout the industry chain. During the year, sales of 5G handsets from China Mobile’s pan-terminal and omni-channel alliance reached 43.88 million units, up by 27.2% year-on-year. Secondly, we optimized grid-based digital intelligence empowerment and operation mechanisms, driving integrated service handling for our CHBN business, as well as “inverted triangle” full-domain support order handling, big screen visualization of grid operations and other key capabilities. To further reduce burden and increase efficiency of the frontline in the grids, we established the “6x1” capability framework1. Thirdly, we innovatively improved online operation by elevating the China Mobile APP so that it was not only effectively integrated but also running smoothly. This has yielded significant outcome, with the number of monthly active customers increasing to 370 million. We introduced large AI models to empower and achieve intelligent interactive service and precision marketing. Thanks to notable progress in channel transformation, our sales effort became more efficient in 2023. Alongside favorable revenue growth, sales expenses as a proportion of revenue continued to decline.

Brand Operations

Taking full advantage of the leading position of our brands, we fully adopted the “brand-first approach” by establishing the new “1+4+4” strategic brand system, centering the “China Mobile” corporate brand and four customer brands – GoTone, M-zone, Easy Own and China Mobile Aijia. Our initiatives for strengthening the customer brands included cultivating a sense of exclusivity for GoTone through three types of exclusive rebates. For M-zone, we focused on digital intelligence and trendiness with special offerings and campaigns for young customers. For Easy Own, we highlighted localized services to shape a sense of warmth. As for China Mobile Aijia, we created the modern smart home lifestyle with full-gigabit network and cloud-based applications. We continued to enhance the four product brands – MIGU Video, China Mobile Cloud, Wutong Big Data, and Jiutian. Among them, Wutong Big Data is a product brand which specializes in big data and provides customers with three cloud-based big data services of PaaS, DaaS and SaaS, as well as a rich variety of products for vertical industries, enabling digital intelligence transformation across industries. Jiutian is a product brand which specializes in AI, and through our proprietary core technology, it creates a new type of intelligent engine based on the Jiutian AI platform, generic and industry-specific large models, and over 450 key AI capabilities. The engine offers full-stack AI services from intelligent computing infrastructure, platform, model capabilities to intelligent applications. In 2023, we continued to enrich our brand proposition. Our brand value put us in the camp of first-tier global operators, advancing the impact of our brand to a new level.

Customer Services

We steadfastly advanced the implementation of a service management system encompassing every aspect and process of service and involving every member of staff. We maintained industry-leading customer perception of service quality, as reflected by notably higher overall satisfaction ratings and lower complaint rates relative to peers. Meanwhile, reputation rating of our “Heartwarming Service” reached 90%. Network quality saw consistent enhancements, with mobile network quality satisfaction maintaining its advantageous position and household broadband network quality satisfaction increasing substantially for two consecutive years. Following our ongoing efforts to improve product quality, customer satisfaction with key products increased by 1.25 percentage points. We were the first in the industry to implement a product quality management system that centers on customer perception. Service touchpoints continued optimizing through continuous upgrades to our service system empowered by AI. As the initial adopter of industry large models, we improved customer issue resolution rates by 5 percentage points relative to traditional models. We spearheaded video customer service to provide visualized hotline services for customers, with average monthly service volume reaching 145 million. We steadily enhanced retail outlet work processing efficiency, shortening integrated service handling time by 47% year-over-year. We further implemented initiatives to protect customer rights, pushing forward the “Sunshine Actions” program to protect customer rights and ensuring information security. We continued to strengthen customer communication and engagement through conducting customer events including manager storefront visits, customer experience tours and General Manager Customer Reception Days to fortify and further uplift our reputation among customers.

1 “6x1” capability framework refers to one-screen overview of indicators, one tool for marketing, one-click service handling, one-point task assignment, one-click order handling, and one-grid management of resources.

In 2024, we will boldly embrace our role as a leading force behind China’s leapfrog development of science and technology, making active contributions to the building of “Cyberpower” and “Digital China”. We will expedite the further advancement of our core business strategy that centers around accelerating digital intelligence transformation and achieving high-quality growth. While furthering cloud migration and digitalization, we will emphasize intelligence as the driving force, expedite the transformation from “+AI” to “AI+”, and better support the development of new quality productive forces. We will devote every effort to deliver in the five areas below:

First, we will continue to build new information infrastructure to solidify our digital intelligence foundation. We will ensure leading network coverage and perception by building premium “double gigabit” networks. We will accelerate the development of CN to support the integration and innovation of applications. We will also expedite the upgrading of our integration platform and strengthen capability supply and empowerment.

Second, we will continue to establish the new information service system, promoting the quality and efficiency of digital intelligence development. We will take a deeper, broader and more thorough approach to value-oriented operations by leveraging our business scale and driving the comprehensive and integrated development of our CHBN+VG markets. Focusing on business priorities, we will improve value creation capabilities and strengthen our existing customer operation system. We will also vigorously develop the corporate market, promote the standardization, productization and platformization of government-enterprise solutions, as well as enriching innovative offerings in the field of Internet of Video Things.

Third, we will deepen application of AI empowerment and improve digital intelligence operation. Internally, we will promote the intelligent upgrade of our business operation model by implementing AI+ smart operation, AI+ smart service, AI+ smart construction and maintenance, and AI+ smart management. Externally, we will provide high-standard smart applications to support the digital transformation of production, lifestyle and governance.

Fourth, we will foster our world-class brand power and establish a leading reputation in digital intelligence, providing premium networks, outstanding products and excellent “Heartwarming Service” experience to enhance the added value of our brand. To enhance brand value, we will endow our corporate brand with technology, customer brands with more innovative operations, and product brands with the outcome of innovation. We will make efforts in brand communications and management to enhance our reputation.

Fifth, we will continue to drive reforms and innovations, as well as enhancing management to stimulate the internal vitality of digital intelligence. We will carry out a new round of reforms to strengthen system planning, enhance technological innovations, implement the “BASIC6” sci-tech innovation plan, and optimize our technological innovation systems and mechanisms. We will improve the mechanisms for governance, talent development and incentive while continuously optimizing our organizational structure. We will enhance our professional management level by strengthening the collaboration and synergy between the headquarters, regional companies and specialized teams so as to ensure performance in their respective roles to contribute to the improvement of corporate management and operational efficiency, and preventing management risks.

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