China’s 5G subscriber numbers to get a correction as carriers ordered to ‘clean up’ sales practices

·5-min read

When Guangzhou resident De De called up his network provider China Mobile last month wanting a cheaper mobile plan, he ended up following the advice of the customer service officer and signed up for a 5G plan.

There was only one catch – he did not have a 5G phone.

However, the 30 gigabytes of data usage covered in the plan could also be used on the 4G network when 5G is not available.

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“I needed the data anyway and it only cost 1 yuan more than my original plan, so I thought ‘why not?’” said De, who uses a 4G version of the Huawei Mate 20 smartphone.

Although De has yet to enjoy any of the benefits delivered by 5G – such as reduced latency and higher capacity – he will have been counted by his carrier as one of China’s 100 million-plus new 5G subscribers. China’s top carriers China Mobile and China Telecom reported 70 million and 38 million 5G subscribers respectively as of the end of June. China Unicom has not disclosed the number of its 5G subscribers yet.

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Meanwhile, a user named GXSD-09 on Chinese social media Weibo complained that he kept receiving calls from China Telecom informing him that his 4G plan would cease service unless he upgraded to 5G. “I can understand the company’s need to gain 5G market share, but I’m speechless with this blatant disregard for customers,” the user wrote in a post.

This faulty calculus – driven by hefty discounts and aggressive upgrade practices – has already been recognised by China’s Ministry of Industry and Information Technology, which recently ordered the networks to ‘clean up’ their figures. It has released data of its own showing that as of the end of June, only 66 million 5G smartphones were actually operating on 5G networks.

“There will be competition among operators to propel the development of 5G … but we disapprove of practices such as forced upgrades where they [operators] try to sign users up for 5G plans in advance,” MIIT official Wen Ku said in a briefing last week.

“Going forward local authorities will pay close attention to such behaviour and step up supervision, especially punishment for forced upgrades without user consent and other practices that hurt consumer rights.”

China Mobile, China Unicom and China Telecom did not immediately respond to requests for comment.

The government’s crackdown comes at a time when China and the US are battling for global dominance in cutting-edge technologies, such as artificial intelligence, 5G mobile technology and Internet of Things (IOT), which are considered key components of being competitive in the new economy.

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President Xi Jinping has put 5G networks and data centres at the top of the country’s plans to spend on “new infrastructure”. The next-generation networks are considered fundamental elements of China’s new digital infrastructure, aimed at driving greater connectivity for consumers and businesses across the country.

But the transition to 5G should not be rushed for the sake of it, said Zhang Dingding, an internet industry commentator and former head of Beijing-based research firm Sootoo Institute. As one of the first batch of 5G users in China, Zhang has tested the speed of 5G in dozens of cities across China with mixed results.

“My actual experience is far from the promise that it would be 100 times faster than 4G, which means it’s unnecessary to force an upgrade,” said Zhang. “We should move step by step, follow the users and the market, instead of creating a false scene of prosperity.”

As of the end of June, China’s top three carriers – which together serve more than 1.6 billion mobile users in the country – had installed 400,000 5G base stations against an annual target of 500,000, according to MIIT’s Wen. China Mobile and China Telecom agreed last year to co-build 5G networks to reduce pressure on their capital expenditure.

Wen said 5G phone sales have been promising, with total shipments of 86.2 million so far this year. “There shouldn’t be any problem reaching 100 million by the end of the year,” Wen added.

As Chinese vendors such as Huawei, Xiaomi, Oppo and Vivo double down on efforts to increase their domestic market share by increasing supply, prices of low-to-medium-end 5G phones are expected to drop to around 1,000 yuan (US$143) this year. In comparison, Xiaomi’s budget Redmi series of 5G-enabled phones currently start at around 1,599 yuan.

Zhang expects more affordable handsets to encourage more users to join 5G. “You can’t get users excited about 5G with expensive phones and data plans,” he said.

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