China’s largest telecom operators entered the third quarter under clear pressure. Weak household spending and a new tax burden hit earnings across core services.
China Mobile and China Telecom reported lower profit and revenue for the period. Their latest figures show a difficult market, despite continued investment in cloud, AI, and enterprise services.
China Mobile posted Q3 profit of CNY27.5 billion, or about $4.1 billion. That marks a 12.5% decline from the same period. Revenue fell 3.4% to CNY242 billion, equal to around $36.2 billion.
Meanwhile, China Telecom reported net income of CNY6.6 billion, or $988 million. That represents a 15.4% drop. Revenue also slipped 2.9% to CNY121.9 billion, or about $18.3 billion.
The numbers follow weak first-half results for both operators. Neither company gave a detailed explanation for the latest decline. However, the market backdrop remains difficult.
A value-added tax increase took effect at the start of the year. At the same time, China’s economy still struggles with cautious spending. That combination has reduced momentum in traditional telecom services.
The shift toward digital services offers some relief. China Mobile said non-core service revenue grew 9.9%. These areas include cloud, AI, and enterprise-focused products.
Yet this growth did not offset weakness elsewhere. Its main business lines fell 5.1%. EBITDA, a key earnings measure before several accounting costs, dropped 6.9%.
For the first nine months, China Mobile earned CNY106.2 billion, or $15.9 billion. That was down 7.9%. Revenue declined 1.3% to CNY780.3 billion, or $116.9 billion.
In its update, the company said it would continue its “transformation from a communications operator into a technology services enterprise.”
That strategy explains its heavy push into advanced services. Still, the transition takes time. Legacy mobile and broadband revenue remains central to overall performance.
The operator now serves 1.01 billion mobile users. Of those, 702 million use 5G services. This scale remains impressive, but scale alone no longer guarantees growth.
Pressure also reached China Tower, another state-owned telecom infrastructure firm. Its business usually enjoys predictable revenue from tower leasing.
Even so, China Tower reported a 12% EBITDA decline for the first three quarters. Revenue fell 3.1%, mainly due to weaker demand from telecom customers.
Tower sales to operators dropped 8% to CNY52.1 billion. Its average tenancy rate also slipped from 1.79 to 1.77 tenants per tower.
However, smaller units showed better momentum. DAS revenue rose 10%. Smart tower sales increased 11%, while energy revenue grew 13%.
Investors reacted quickly in Hong Kong. China Mobile fell 5%, while China Telecom dropped 8.8%. China Tower declined 5.5%.
The results highlight a wider telecom challenge. Operators need new digital revenue, but core demand remains essential. For China’s telcos, that balance now looks harder to maintain.
