And Analysis

Business Review

The following table sets out the key operating data for 2018, 2019 and 2020:





over 2019

Mobile subscribers






Mobile voice usage

Million minutes





Handset data traffic






Wireline broadband subscribers






e-Surfing HD subscribers






IoT connected devices






Access lines in service






Customers trying out VR application

Cloud gaming application attracted customers

Thriving 5G business development

Management presented at new media forum

AR application transformed a shopping mall in Shanghai to an aquarium

Key Operating Performance in 2020

In 2020, the Company continued adhering to its customer-oriented approach, coordinated its efforts in Epidemic prevention and control with operation and development, seized the opportunity emerging from the digital transformation of the economy and society to actively push forward its “Cloudification and Digital Transformation” strategy and accelerate its cloud-network integration. The Company also continued to enhance sci-tech innovation capabilities and deepen corporate reforms. As a result, the Company made a significant progress in its high quality development. The Company’s operating revenues grew by 4.7% year-on-year to RMB393.6 billion, of which service revenues increased by 4.5% year-on-year to RMB373.8 billion, a growth rate that remains higher than the industry average.

5G drove development of personal informatisation service; scale of mobile subscriber base continued to expand

Adhering to customer-oriented operating principles and backed by “5G + e-Surfing Cloud”, the Company forged competitive advantages with enhanced network experience and differentiated services, expedited the upgrade of its 5G applications, optimised its 5G member privilege scheme and enhanced personal informatisation services, which led to solid expansion of its mobile subscriber base. The Company also adhered to proactive marketing strategy and strengthened precision marketing capabilities empowered by data. By targeting the actual usage scenarios and needs of customers across different segments, the Company continued to optimise product convergence and customer upgrade strategies to expand the scale of its 5G subscriber base. Regarding 5G application upgrade, the Company hastened the upgrades to e-Surfing-branded ultra HD, cloud games, cloud computers and cloud VR, among other applications. The Company also pioneered to launch “e-Surfing One”, its proprietary brand of 5G cloud mobile phone, facilitating innovative device-application integration. The Company improved customer perceptions by enriching its 5G member privilege scheme, rolling out exclusive privileges regarding network, security and services, and expanding portfolio of concessionary privileges with cooperation partners for common use cases in daily living, education, and health. The Company strengthened terminal operation by fully leveraging its sales channels and sales points as well as broadening its Orange Instalment Payment Service, to meet consumers’ demand for upgrading to 5G devices and to foster popularity of 5G terminals. In 2020, the Company’s mobile subscriber base reached 351 million, representing a net addition of 15.45 million, with market share gain maintained. The number of 5G package subscribers reached 86.50 million, with a penetration rate of 24.6%. The scale of its 5G members and featured application users expanded rapidly, while total handset data traffic and mobile service revenue continued to grow.

Expedited family informatisation services upgrade with overall value of broadband business increased

The value contributed by the Company’s family informatisation business continued to grow as the Company focused on meeting the demand for digitalisation and intelligentisation from family customers, by continuing to enhance the quality of its family connectivity services and upgrading its Smart Family product and service ecosystem. With the “Triple Gigabit” access service (i.e. 5G + Fibre Broadband + WiFi6), the Company enhanced the customer experience of family services by promoting convergence of 5G and family services and accelerating the speed upgrades of family broadband and WiFi services. By upgrading the specifications of customised Whole-home WiFi terminals and launching Gigabit network customisation service, the number of Whole-home WiFi subscribers increased by 117% year-on-year. The Company strengthened the AI functions and interactive experience of its e-Surfing Webcams and boosted scale development by use case-based marketing for “safe villages” campaign, leading to a 505% year-on-year growth of e-Surfing Webcam subscribers. Furthermore, the Company built whole-home intelligent solutions by enriching the portfolio of terminals and applications in functional use cases such as home security surveillance, living space cosiness, education and entertainment. The number of devices connected to the Smart Family Platform increased by more than 60%. In 2020, the number of broadband subscribers for the Company reached 159 million with a net addition of 5.40 million, while broadband access ARPU recorded positive year-on-year growth. Revenues from Smart Family reached RMB11.1 billion, representing a year-on-year increase of 37.5%. Smart Family business also propelled a year-on-year increase of 4.2% for broadband blended ARPU to RMB44.4.

Reform and innovation of informatisation services for government and enterprise customers deepened, revenue size of Industrial Digitalisation maintained an industry-leading position

Firmly seizing the opportunities emerging from the digital transformation of the economy and society and leveraging 5G, cloud and other emerging technologies, the Company accelerated the development of the Industrial Digitalisation business by constructing digitalised platform, repackaging fundamental capabilities, and stimulating new demand for integrated intelligent information services with supply-side reform. The Company was the first to achieve large-scale commercialisation of 5G SA, and launched 5G customised network service with three modes called “Wide-area”, “Adjacent” and “Wingspan” to meet different needs of vertical industry customers for features such as low latency, massive number of connections, network security and cloud-edge coordination. The Company also pushed ahead with its efforts to develop benchmark projects in industrial Internet, new media, smart healthcare, transportation and logistics and other areas, while also gradually exploring use cases such as remote control, HD live broadcasting and machine vision. Furthermore, the Company stepped up the optimisation of its cloud resource structure, expedited problem-tackling efforts in the key core technologies of e-Surfing Cloud, and built secure, reliable, and trustworthy cloud-network integration products that meet the needs of customers for different scenarios of cloud usage. In order to strengthen capabilities for professional services and operations, the Company set up dedicated business groups to serve customers in different sectors. Leveraging on its digitalised platform, the Company continued to enrich fundamental capabilities and aggregate application ecologies to support the digital transformation of different industries. In 2020, revenue arising from the Company’s Industrial Digitalisation amounted to RMB84.0 billion, representing an increase of 9.7% year-on-year. Revenue from Overall Cloud services continued to grow robustly, reaching RMB13.8 billion. The number of IoT connected devices was nearly 240 million, with revenues for IoT increasing by 16.1% year-on-year.

Actively pursuing digital transformation, with continual efficiency improvements of operations and management

Fully leveraging the advantages arising from corporate informatisation, the Company expedited digital transformation, leading to continual improvement of the quality and efficiency of operations and management. The Company promoted the digital transformation of customer operations by building customer operation teams comprising relevant talents, strengthening data modelling for different sales scenarios, improving data-driven insight capabilities, utilising AI for marketing activities to match customer needs with high precision. The coverage of targeted marketing was over 85%, while the Company’s customer retention and digital and intelligence marketing capabilities also significantly enhanced. By pursuing the digital transformation of sale channel operation, the Company took advantage of online-offline integration, accelerated the construction of a marketing service system that integrates all channels, covers all use cases and engages the cooperation of all ecologies. The Company’s volume of online subscriber development increased by 7 percentage points year-on-year as it moved businesses and services online. The Company also continued to transform its physical outlet network to operate with chain store-like and experience-oriented approach, providing a continuously improving customer service perception on scenario-based experience. The Company pressed on with the digital transformation of customer services by establishing a cloud-based platform for customer service staff to provide service at home, promoting remote video service counters, and fully utilising intelligent voice navigation and online service contact points to assure service quality during the Epidemic. Hence, the Company enjoyed an industry-leading overall satisfaction.

Earnestly pushing forward network construction while further expanding cloud-network integration capabilities

The Company adhered to the strategic direction of “Cloud central, Network around, Network adaptive to cloud, Cloud and network as one”, and spurred the construction of new infrastructure of cloud-network integration. Through the pursuit of co-build and co-share, the Company had over 380 thousand 5G base stations in use. The Company also led the development and release of “5G SA Implementation Guidelines”, while taking a global lead in large-scale commercial use of 5G SA networks. Guided by market demand, the Company continued to expand fibre network coverage and deployment of Gigabit optical broadband network. The Company also completed the construction of five major regional ROADM backbone networks covering the entire country, alongside a new planar network for ChinaNet to further reduce cloud-network latency. The Company optimised overall network layout according to “2+4+31+X+O” principle, and accelerated the construction of e-Surfing Cloud and IDC. It also commenced the development of MEC and promoted cloud-edge coordination. The Company continued to push ahead with the construction of its next-generation cloud-network operating system and progressively established systems for unified cloud-network production and cloud-network business assurance.

In 2020, following the outbreak of Epidemic, the Company united as one and adhered to the use of technology to support Epidemic control, actively mobilising equipment, technology and personnel to assure the safe and stable running of its network and business operations. The Company leveraged the advantages of 5G, cloud-network integration, AI and other areas to quickly set up 5G networks and cloud platforms at Huoshenshan Hospital, Leishenshan Hospital and other hospitals, and launched “Operation Warm Spring”, which comprised of 9 informatisation services such as cloud access for SMEs, e-Surfing Cloud conferencing and e-Surfing HD Classroom. The Company also co-developed services such as the “Big Data Itinerary Card” and “Health QR Code” with various collaborators across society to support Epidemic prevention and the resumption of work, production and schools effectively.

Propelled live streaming economy development

Develop smart manufacturing project leveraging 5G technology

Telemedicine became a benchmark project for 5G application

Outlook for 2021

China embarks on its 14th Five-Year Plan in 2021. With vast growth potential brought about by the flourishing digital economy, the Company will enter a new stage of development and carry out new development principles and build new development models. The Company will propel thorough execution of “Cloudification and Digital Transformation” strategy on all fronts, deepen corporate reforms, strengthen sci-tech innovation, construct high-standard open ecologies, and make all-out efforts to promote corporate high-quality development.

The Company will continue to insist on a customer-oriented approach while proactively exploring the informatisation services market. The Company will expedite expansion in informatisation market for government and enterprises, deepen the overall hierarchy reform of vertical industry servicing teams, strengthen capabilities of local system integration business teams and dedicated specialist teams for different sectors, spur the application and promotion of its fundamental capabilities and proprietary digital platforms to support the upgrade of industries, governance as well as consumption. The Company will speed up expansion in the family informatisation market, by providing whole-home intelligent solutions leveraging cloud-network integration, and pushing forward the upgrade of its family business towards digitalised and intelligent services covering all scenarios. The Company will also extend family services to community and public services by interconnecting the platforms of Smart Family, smart community and smart city services. The Company will also speed up expansion in the personal informatisation market by building an agile, intelligent and closed-loop customer marketing and servicing system, and offering a new model of “Platform + Applications + Ecosystem” for 5G-based personal informatisation services on digital lifestyle, with an aim to continuously fulfil customers’ digitalisation demand for a better quality of living.

The Company will speed up digital transformation to continue improving development efficiency and customer experience. It will further accelerate digital transformation internally and externally, with particular focus placed on digitalisation of key elements, operations and service. Internally, it will promote digital operations on all fronts by leveraging digital means to facilitate precision investment and cost controls to improve quality and efficiency as well as energy saving and emission reduction. Externally, the Company will leverage digitalised platform to aggregate fundamental capabilities, enhance level of intelligence with data to empower the digitalisation and intelligentisation of products, services and industries.

The Company will insist on co-creating and co-sharing to pursue win-win outcome and build open and high-standard cooperative ecologies. It will also nurture a healthy industry ecology focusing on key areas, by deepening inter-industry coordination, expanding scope of co-building and co-sharing, as well as by broadening cooperation on innovations in emerging areas. The Company will boost the momentum for high-quality development by continuously expanding platform-based cooperation, and leverage core platform to aggregate ecologies of 5G, family DICT, cloud, IoT, vertical industries and supply chains, to smooth out the circulation among and within key industries.

In 2021, the Company will adhere to new development principles, step up sci-tech innovations, expedite the construction of new information infrastructure by integrated development of 5G, cloud and artificial intelligence, continue to build digitalised platform based on cloud-network integration and nurture open ecologies, with a view to support the intelligentisation upgrade of various industries and empower the digital transformation of the entire society. The Company will work with various parties to enjoy new digital lifestyles, and to capitalise the new opportunities stemming from the digital economy together.