In the first quarter of 2021, the Company firmly implemented the strategy of focus, innovation and cooperation and accelerated the comprehensive digital transformation. It endeavoured to optimise the ecology of the industry and saw remarkable results in the network “co-build and co-share”. It further unleashed the power of the mixed-ownership reform and achieved growing momentum in operation and development. The Company continued to make solid strides on high-quality development. In the first quarter of 2021, the Company’s total service revenue amounted to RMB 73.924 billion, up by 8.2% year-on-year. The Company’s EBITDA amounted to RMB 23.64 billion, up by 0.3% year-on-year. EBITDA as a percentage of service revenue was 32.0%. The profit attributable to the equity shareholders of the Company amounted to RMB 3.843 billion, up by 21.4% year-on-year. In the first quarter of last year, the profit attributable to the equity shareholders of the Company decreased by 13.9% year-on-year mainly due to, among others, the impact of the COVID-19 pandemic.
The Company actively participated in creating positive industry dynamics, advocating rational competition and sustainable development. It drove consumption upgrade through 5G innovative applications and content, leveraged privileges and financial instruments to improve product value while strengthening pan-integration service. It continued to strengthen digital transformation and innovative differentiated operations, and leveraged Big Data analytics to power target marketing and retention management. At the same time, it developed differentiated edges in 5G+ industry vertical applications, focusing on key areas such as industrial Internet, smart city and medical and healthcare, etc. Our 5G network achieved coverage in urban areas of all cities nationwide, affluent counties and indoor coverage of major premises, with industry-leading 5G network speed and network quality comparable with the leading operator. In the first quarter of 2021, mobile billing subscribers registered a net addition of 3.48 million, reaching a total of 309.29 million. 5G package subscribers increased by 21.02 million to 91.85 million, effectively driving mobile billing subscriber ARPU to increase by 11.5% year-on-year to RMB 44.6. Mobile service revenue amounted to RMB 41.071 billion, up by 8.8% year-on-year.
In consumer market, the Company deeply advanced industry cooperation and created a 5G pan-smart terminal ecosystem integrating “terminal + content + application”, empowering the consumer Internet market development. The Company actively prepared commercial trial of 5G Messaging and developed lightweight portal to improve product competitiveness by adhering to industry collaboration and co-built eco-system.

In the government and enterprise market, focusing on areas such as industrial Internet, smart city, medical healthcare and others, the Company successfully built a number of 5G lighthouse projects, garnering over 250 high-quality lighthouse customers, and achieved 5G commercialisation in 2B (To Business) setting. The Company officially released three 5G private network products and built a centralised 5G private network/MEC self-service platform, elevating 5G innovative products and applications to a new level. In addition, leveraging the first-mover advantages in 5G and industry verticals, the Company led in establishing a 5G fund of funds to accelerate the formation of proprietary core competency system. With more than 1,000 members in 5G Application Innovation Alliance, the Company made phased progress in the industry eco-system construction.
The Company leveraged the differentiated advantages of broadband quality and content to strengthen integrated operations, achieving steady growth in the fixed-line broadband services. In Northern China, the Company highlighted its broadband quality and service leadership to maintain its business scale. In Southern China, the Company continued to step up cooperation, activated broadband port resources and improved its operating system. Focusing on household market, it strengthened value-oriented operation for household users through bundling of smart home products, video and privileges. Its precision marketing and retention management were also powered up with Big Data analytics. In the first quarter of 2021, fixed-line broadband subscribers registered a net addition of 2.03 million, reaching a total of 88.13 million. Fixed-line broadband access revenue amounted to RMB 10.905 billion, up by 1.1% year-on-year.
The Company firmly seized the development opportunities of digital industrialisation and industry digitisation. Focusing on key areas such as smart city, digital government and industrial Internet, the Company promoted the integrated marketing model of “cloud + smart networks + smart applications” combining the capabilities of cloud, Big Data, IoT, artificial intelligence, security and blockchain to progressively develop application products in depth in key industries. The research and development, promotion and operation capabilities of the Company’s proprietary products steadily improved, empowering the digital transformation of government and enterprise customers. In the first quarter of 2021, revenue from industry Internet business amounted to RMB 14.408 billion, up by 25.9% year-on-year.
The Company executed the new development philosophy, implemented the new infrastructure requirements and built the world’s first and largest “co-build and co-share” 5G network with China Telecom, with the total scale of 5G base stations of 380,000 as at the end of 2020, achieving the coverage scale basically equivalent to that of the leading operator for the first time in history. The “co-build and co-share” initiative resulted in a cumulative saving of network investment of over RMB76.0 billion for both parties. It also significantly reduced network operating costs and greatly shortened the network deployment cycle. As at the end of 2020, the Company realised the world’s first scale commercialisation of Stand-alone network and achieved 100% Network Function Virtualisation (NFV) in 5G core network. In 2020, the Company achieved a scale breakthrough in 4G networks “co-build and co-share” with China Telecom by adding 170,000 “co-build and co-share” 4G base stations and saved a total of RMB9.0 billion for both parties in network investment. The Company actively promoted the co-build of optical cables and the co-share of fibre core and cloud infrastructure, significantly improving the network utilisation and efficiency.
The Company will leverage its various 5G unique edges to drive revenue growth and value enhancement in future, including:
  • 5G network “co-build co-share”, which can efficiently enhance our edges and return
  • Centralised IT system, which can support open cooperation
  • Potential collaboration with 14 strategic investors and benefits from market-oriented system and mechanism reform, leveraging mixed-ownership reform
  • Full SDN upgrade and the only operator in the nation with automatic service enabling for multiple cloud vendors’ networks; and
  • Established long-term relationship with government and enterprise customers as well as innovative business capabilities
In 2020, the cooperation of the Company with the eco-system progressed steadily. The joint ventures such as Yunlizhihui, Yunjingwenlv and Smart Steps continued to promote product research and development and iteration upgrade to boost market expansion, significantly increasing the Company’s product capabilities and market shares in areas such as smart city, tourism and demographic Big Data. The Company also actively deployed new tracks by establishing several strategic cooperation centres and joint laboratories with Baidu, Alibaba and JD to explore 5G application scenarios with artificial intelligence, edge computing and network slicing, etc., creating differentiated competitive advantages brought by resources edges of strategic investors of mixed-ownership reform.
The Company deeply implemented the new development philosophy and adhered to win-win cooperation. It fully implemented “co-build and co-share” of 5G network, further improving the cost efficiency. In 2020, with effective control of the investment pace, the capital expenditure amounted to RMB67.6 billion, of which 5G CAPEX was about RMB34.0 billion. The Company insisted on focused, precise and value-oriented deployment with iterative investment flexibility, which significantly improved network quality and enhanced network service support capabilities. In 2020, the Company’s mobile network NPS and fixed-line broadband NPS continued to improve, achieving remarkable results in high-quality network development.

Full-year CAPEX for 2021 is expected to be approximately RMB70.0 billion, of which 5G CAPEX is about RMB35.0 billion.
The objective of the dividend policy of the Company is to achieve a long-term, sustainable and steadily increasing dividend, with a view to maximising the shareholders’ value. The declaration and payment of future dividends will depend upon, among other things, financial condition, business prospects, future earnings, cash flow, liquidity level and cost of capital. The Company believes such policy will provide the shareholders with a stable return in the long term along with the growth of the Company. Pursuant to the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and the Company’s articles of association, the Company may only pay dividends out of profits available for distribution.

Taking into consideration the Company’s profitability, debt and cash flow level, capital requirements for its future development etc., the Board recommended the payment of a final dividend of RMB0.164 per share for the year ended 31 December 2020. Going forward, the Company will continue to strive for enhancing its profitability and shareholders’ return.
The former US President issued an executive order 13959 (the “Executive Order”) on 12 November 2020, and subsequently the US Department of Treasury’s Office of Foreign Assets Control issued the guidance. The Executive Order and the guidance prohibit any transaction by any US person in publicly traded securities (including, among others, derivatives thereof) of certain Chinese companies, including the Company. The New York Stock Exchange (“NYSE”) staff determined that, based on the Executive Order and the guidance, it commenced the process to delist the Company’s American Depositary Shares (the “ADSs”) and suspended trading in the Company’s ADSs from 11 January 2021. In order to protect the interests of the Company and its shareholders, on 20 January 2021, the Company filed with the NYSE a written request for a review of the determination by a Committee of the Board of Directors of the NYSE. On 6 May 2021, the Committee affirmed the determination to delist the Company’s ADSs. Please refer to the Company’s announcement dated 7 May 2021 for details. On 7 May 2021, NYSE filed a Form 25 with the US Securities and Exchange Commission to strike the Company’s ADSs from listing and registration. The delisting of the Company’s ADSs was effective 18 May 2021.

Since its listing on The Stock Exchange of Hong Kong Limited and the NYSE in 2000, the Company has complied strictly with the laws and regulations, market rules as well as regulatory requirements of its listing venues, and has been operating in accordance with laws and regulations. The Company was disappointed by the Executive Order and NYSE decisions, which led to a negative impact on the trading prices of its ordinary shares and ADSs and harmed the interests of the Company and its shareholders. The Company endeavours to drive revenue, profit and dividend growth and leverage robust business development to mitigate the pressure arising from the Executive Order and NYSE decisions. The Company will continue to pay close attention to the development of related matters and seek professional advice and reserve all rights to protect lawful rights of the Company.
The delisting of the Company’s ADSs has taken effect on 18 May 2021. The Company resolved to terminate the ADSs program and has given a notice to The Bank of New York Mellon, as the depository for the Company’s ADSs, for the termination of the ADS Program.

As at 20 July 2021, the amount of the Company’s ADSs in issue was approximately 4.2 million, which represented approximately 0.1% of the Company’s total issued shares. The Bank of New York Mellon has given a notice to all holders of ADSs that the ADS Program will terminate on 18 October 2021 (U.S. Eastern Time). Holders of ADSs will have the right, at least until the Termination Date, to return the ADSs to The Bank of New York Mellon in exchange for ordinary shares of the Company with each ADS returned to be exchanged into 10 ordinary shares of the Company in accordance with the terms and conditions of the deposit agreement. The Company’s ordinary shares are traded on The Stock Exchange of Hong Kong Limited. The Bank of New York Mellon expects to commence the sale of ordinary shares of the Company represented by the remaining ADSs as soon as practicable after the Termination Date, and will pay the net cash proceeds, after deducting applicable fees and expenses, to the holders of such remaining ADSs.

The contact details of the Bank of New York Mellon are as follows:

Shareholder Services, P.O. Box 505000, Louisville, KY 40233–5000
1-888-269-2377 (toll free in USA)
1-201-680-6825 (international)
Last updated: 23 July 2021