(Economic Observer) Chinese telecom operators are increasing their deployment of AI infrastructure

　　China News Service, Beijing, March 27 (Reporter Liu Yuying) China's three major telecom operators have all announced their 2023 results as of this week. Judging from the announced capital expenditure plans, operators will increase investment in emerging businesses such as computing infrastructure and digital transformation in 2024.

　　In 2023, all three major operators will maintain steady growth. China Telecom's operating revenue in 2023 will be 513.6 billion yuan (RMB, the same below), a year-on-year increase of 6.7%. Net profit was 30.4 billion yuan, a year-on-year increase of 10.3%

　　China Mobile's annual operating revenue reached 1,009.3 billion yuan, a year-on-year increase of 7.7%, breaking through the trillion yuan mark for the first time. Profit attributable to shareholders was 131.8 billion yuan, a year-on-year increase of 5.0%.

　　China Unicom's operating income was 372.597 billion yuan, a year-on-year increase of 5%; net profit attributable to the parent company was 8.173 billion yuan, a year-on-year increase of 12%.

　　In recent years, the three major telecom operators have continued to transform from communication pipes to digital and intelligent transformation bases, and their information service capabilities have been significantly enhanced.

　　For example, in terms of computing power network, China Mobile has initially built a national computing power network with leading technology and scale, and the layout of full-coverage intelligent computing capabilities has accelerated. In 2023, the scale of intelligent computing power will reach 10.1 EFLOPS (FLOPS means floating point execution per second). The number of operations, 1EFLOPS=10^18FLOPS), increased by 206% year-on-year.

　　Ke Ruiwen, chairman of China Telecom, said at the performance presentation meeting that around the new requirements for cloud service providers in the big model era, Tianyi Cloud has accelerated its comprehensive upgrade to intelligent cloud, building a cloud-intelligent super-integrated ubiquitous computing power infrastructure, and building a smart gathering, The three major intelligent computing platforms, Yunxiao and Xirang, have become the leading large model computing power service providers in China.

　　In terms of revenue, digital transformation business has become a new growth engine. Yang Jie, chairman of China Mobile, said that China Mobile's digital transformation revenue will contribute 89.7% to the incremental communication service revenue in 2023, accounting for 29.4% of the communication service revenue, and is the first driving force for the company's revenue growth.

　　China Telecom's industrial digital business revenue will reach 138.9 billion yuan in 2023, a year-on-year increase of 17.9%, accounting for 29.9% of service revenue, and its incremental contribution to service revenue will increase from 51.6% in 2021 to 70.4%. Tianyi Cloud’s revenue reached 97.2 billion yuan, a year-on-year increase of 67.9%.

　　Chen Zhongyue, chairman of China Unicom, said that in 2023, China Unicom's computing, network and digital intelligence business will achieve revenue of 75.2 billion yuan. The revenue scale of this business accounts for about a quarter of the total revenue of China Unicom's two main businesses, but it brings more than half of the company's new revenue.

　　Looking forward to 2024, the three major operators will reduce their capital expenditures on communication networks, but will increase investment in AI infrastructure and other aspects.

　　According to the financial report, China Mobile's 5G investment will drop to 69 billion yuan in 2024, compared with 88 billion yuan in 2023. In 2024, China Mobile will launch 5G-A (5G evolved and enhanced version) in 300 cities. Yang Jie said that because 5G-A is built on the basis of 5G, it is not a reinvention, and the investment is expected to be 1.5 billion yuan.

　　China's three major telecom operators are all promoting "artificial intelligence +", and intelligent computing centers are their infrastructure. China Mobile plans to deploy 17EFLOPS of intelligent computing capabilities in 2024.

　　China Telecom will focus on developing new businesses, and its investment in industrial digitalization is expected to account for 38.5% in 2024, an increase of 2.5% from 2023. In addition to mobile networks, 18 billion yuan will be invested in cloud and computing power to comprehensively build a flexible, elastic, and green intelligent computing center. The intelligent computing capacity will be improved by more than 10EFLOPS to more than 21EFLOPS.

　　Chen Zhongyue said that China Unicom's investment focus will shift from the stable Internet communications business to the high-growth computing, network, digital and intelligence business. In the new year, investment in 5G networks will be significantly reduced, but capital expenditures in AI will be increased, and the company will insist on moderate advancement and strengthen layout. (over)