China’s 5G market is entering a crucial phase, focusing on monetization as the country’s penetration nears saturation. With operators turning their attention to enterprise services and industrial applications, revenue growth is expected to move beyond simple subscriber expansion. It is no longer about just adding users, but leveraging advanced services and creating high-value opportunities.
The landscape of China’s 5G is rapidly changing. By 2030, penetration is projected to reach 88%, prompting operators to emphasize extracting value from innovative services and premium experiences. According to Srikanth Vaidya from GlobalData, incremental revenue growth will largely emerge from enterprise and industrial 5G applications, IoT connectivity, and premium services. This represents a departure from the early deployment phase, which focused on coverage and subscriber numbers.
Operators are now prioritizing Average Revenue Per User (ARPU) through innovative service offerings. “Operators will continue to uplift their ARPU via high-speed data plans and by offering differentiated experiences with guaranteed speeds and low-latency capabilities, such as low-latency gaming and immersive media,” said Vaidya.
Industrial 5G and private networks provide higher, stable revenues due to the long-term nature of their contracts compared to consumer services. Smart manufacturing is one area showcasing this shift, with Vodafone and other companies targeting business use cases for growth. Contracts in these sectors tend to have lower churn rates and higher revenue per contract, presenting a lucrative avenue for operators.
Government policy continues to play a pivotal role in China’s 5G growth. China’s administrative approach to spectrum allocation avoids competitive linkages, which lowers costs for operators. “China has administratively allocated its spectrum to operators based on their needs and national objectives, and not via competitive bidding,” Vaidya said, highlighting the resulting reduction in operators’ financial burdens and encouraging nationwide rollouts.
Furthermore, government-backed network sharing initiatives promote rapid deployment and broaden coverage. China leads globally with the highest number of 5G base stations, underscoring its vast commitment to expansive coverage and service innovation.
This strategic shift is evident in the overall mobile communication services growth in the APAC region. The revenue is projected to increase at a compound annual growth rate (CAGR) of 2.3% by 2030. As the traditional consumer market becomes stable, the focus on business solutions and Vodafone strategies is poised to drive the next wave of growth in China’s telecommunications sector.
