Slowdown in Growth

After six years, the three major telecom operators in China have once again slowed their growth. Recently, China Unicom, China Telecom, and China Mobile released their 2025 financial reports, showing revenue growth of only 0.7%, 0.1%, and 0.9% respectively. In terms of net profit attributable to the parent company, China Unicom and China Telecom saw slight increases, while China Mobile experienced a decline, marking the lowest growth rates for both revenue and net profit in six years.

In terms of business performance, the traditional voice and broadband services have reached their growth peak. A significant growth driver in recent years, cloud services, also saw a drastic drop in revenue growth.

Looking ahead to 2026, all three telecom operators mentioned the need to deeply promote “AI+” strategies to seize new high ground as the telecom industry transitions between old and new drivers of growth. However, experts point out that the operators still face severe pipeline issues and have not formed an ecological closed loop. Whether they can reverse the current trend with AI remains to be seen.

Financial Performance Overview

According to the financial reports, in 2025, China Unicom’s revenue was 392.22 billion yuan, up 0.7% year-on-year, with a net profit of 9.13 billion yuan, up 1.1%. China Telecom reported revenue of 532.93 billion yuan, up 0.1%, and a net profit of 33.19 billion yuan, up 0.5%. China Mobile’s revenue was 1,050.19 billion yuan, up 0.9%, but its net profit fell by 0.9% to 137.09 billion yuan. All three companies have reported their lowest growth rates since 2020.

From 2020 to 2024, China Unicom’s revenue growth rates were 4.6%, 7.9%, 8.3%, 5%, and 4.6%. The net profit growth rates were 10.8%, 14.2%, 15.8%, 12%, and 10.5%. For China Telecom, the revenue growth rates were 4.7%, 11.3%, 9.4%, 6.9%, and 3.1%, while the net profit growth rates were 1.6%, 24.4%, 6.3%, 10.3%, and 8.4%. China Mobile’s revenue growth rates were 3%, 10.4%, 10.5%, 7.7%, and 3.1%, with net profit growth rates of 1.1%, 7.5%, 8.2%, 5%, and 5%.

The reasons for the significant slowdown in performance growth have not yet been clarified by the telecom operators despite inquiries from the media.

Factors Behind the Slowdown

The collective slowdown was anticipated. On one hand, the traditional personal communication business market is saturated. On the other hand, 5G has reached its peak after several years of development. Against this backdrop, traditional business growth has stagnated, while emerging businesses have not yet reached a scale sufficient to shoulder the burden. Industry competition has intensified, leading to a low-growth predicament. Zhang Yi, CEO of iiMedia Research, stated that the telecom market has entered a stage of stock competition, contributing to the collective slowdown.

Additionally, the ongoing policies to reduce fees and increase speeds have continuously lowered data rates, further weakening revenue growth in traditional communication services. The substantial investment in 5G network construction has not yet translated into sufficient monetization capabilities to offset declines in traditional business.

The last time the three major telecom operators faced a halt in revenue or net profit growth was back in 2019, when China Mobile reported a 1.2% year-on-year revenue increase but a 9.5% decline in net profit. China Unicom’s revenue fell by 0.1%, while its net profit rose by 11.1%. China Telecom’s revenue decreased by 0.4%, and its net profit also declined by 3.3%.

Challenges in Cloud Services

Specifically, while the number of users for traditional voice and broadband services continues to grow, the corresponding revenue growth has peaked.

In 2025, China Unicom had over 357 million billing users, with a net increase of 13.32 million. Its broadband users exceeded 129 million, with a net increase of 7.61 million. However, revenue from voice calls and monthly fees dropped by 4% to 19.56 billion yuan, while broadband and mobile data service revenue fell by 0.6% to 153.22 billion yuan.

China Telecom’s mobile users reached 439 million, with a net increase of 14 million, while its broadband users reached 201 million, with a net increase of 4 million. Mobile communication service revenue grew by 0.9% to 204.53 billion yuan, while fixed-line and smart home service revenue increased by 0.2% to 125.98 billion yuan.

China Mobile reported 1.005 billion mobile users, with a net increase of 1 million, and 329 million broadband users, with a net increase of 9.99 million. However, revenue from voice services dropped by 4.9% to 66.63 billion yuan, SMS and MMS revenue fell by 4% to 29.60 billion yuan, and wireless internet revenue decreased by 4.4% to 369.09 billion yuan. In contrast, wired broadband revenue grew by 8.7% to 141.57 billion yuan.

Notably, the cloud services that had been a significant growth driver for the three major telecom operators in recent years have seen a dramatic decline in growth rates in 2025.

China Telecom’s Tianyi Cloud revenue growth dropped from 17.1% in 2024 to 6%, while China Unicom’s cloud revenue growth fell from 17.1% to 5.2%. China Mobile did not disclose its cloud revenue separately in the 2025 report, but it had reported a 20.4% year-on-year growth in 2024. The reasons for this lack of disclosure have not been clarified by China Mobile.

Zhang Yi commented that telecom operators started cloud services relatively late, and their previous rapid growth was largely due to their state-owned status, allowing them to secure many government contracts. However, the foundational benefits in the government and enterprise cloud market are now diminishing. Operators have shifted from focusing on scale to prioritizing profitability, leading to a noticeable decline in growth rates.

Future Outlook for 2026

As the telecom industry enters a critical period of transitioning between old and new drivers of growth, how can these operators seize new opportunities? All three major telecom operators have mentioned “AI+” in their financial reports.

China Unicom stated that in 2025, it aims to capture new technological and industrial innovation opportunities, with strategic emerging industry revenue accounting for over 86%, and AI revenue growing over 140% year-on-year. In 2026, the focus will be on connectivity, computing power, services, and security, continuing to deepen intelligent integration and innovation, and accelerating the development of model-as-a-service and intelligent agents-as-a-service.

China Telecom emphasized its deep understanding of the disruptive changes brought by AI and will continue to advance the “AI+” initiative, integrating AI into core operational processes, creating application scenarios across five domains: intelligent customer service, intelligent marketing, intelligent operations, intelligent research and development, and intelligent management.

China Mobile highlighted that intelligent services are the key to winning future competition. In 2025, it will deepen the “AI+” initiative, playing an innovative role in smart living, smart production, and smart governance. The company plans to upgrade its foundational model to version 3.0, launch over 100 AI+ products and solutions, and develop a high-quality dataset of 3,500 TB, with data algorithm revenue increasing by 12.6% and smart cultural revenue growing by 13.3%. In 2026, the focus will be on strengthening and expanding communication, computing power, and intelligent services, promoting qualitative improvements and reasonable quantitative growth.

Experts believe that while the basic models in the AI field for telecom operators remain relatively simple, they still primarily act as sellers of computing power. They need to establish more intelligent computing centers to provide services to clients and charge for the tokens used in processing information.

The biggest challenge for telecom operators is the lack of an ecological closed loop, as they continue to play a “pipeline” role, primarily providing basic connectivity. Compared to internet companies, they have fewer application points, making it more challenging in the token economy era. Operators should not only focus on AI concepts but also consider how to collaborate with leading model vendors to create more ecosystems and implement the token economy.

As the commercial rollout of 6G is still 4-5 years away, the coming years may be particularly challenging for telecom operators as profit margins shrink and the scope for exploration in vertical fields becomes limited.

Overall, while the three major telecom operators are expected to see some recovery in their overall performance driven by emerging businesses in 2026, growth pressures will remain. Their strategic focus should shift towards expanding 5G applications, differentiating cloud services, and integrating AI innovations to prepare for the arrival of 6G.