China’s mobile operators lose 21 million users as virus bites


31st March, 2020 10:27:47 printer

China’s mobile operators lose 21 million users as virus bites

China’s wireless carriers are reporting drops in users as the coronavirus crisis cuts business activity, with China Mobile Ltd., the world’s largest carrier, reporting its first net decline since starting to report monthly data in 2000.

China Mobile subscriptions fell by more than 8 million over January and February, data on the company’s website show. China Unicom Hong Kong Ltd. subscribers fell by 7.8 million in the period, while China Telecom Corp. has said it lost 5.6 million users last month.

The rare industrywide slump in subscribers shows the pandemic crisis that first emerged in China late last year is crimping growth even at businesses that provide essential services and earn monthly revenue.

Part of the drop could be caused by migrant workers -- who often have one subscription for where they work and another for their home region -- canceling their work-region account after the virus prevented them from returning to work after the Lunar New Year holidays that began in late January, said Chris Lane, an analyst at Sanford C. Bernstein & Co.

China Mobile shares fell 2.7% in Hong Kong trading Monday, compared with a 4.9% slump for the benchmark Hang Seng Index. China Telecom slid 6.3%, while China Unicom declined 6.4%.

While the drop in users is unusual, the total is small relative to total wireless subscriptions which have risen to a combined 1.6 billion for the three carriers.

Things may improve starting this month as work in factories and other businesses in China resumes, Lane said.

Net income fell 9.5% last year at China Mobile, partly on government mandates to cut prices and improve service. The company, which reported earnings last week, told analysts revenue would remain stable this year, a sign management was not worried about the fall in subscribers, Lane said.