CICC: The total volume of the three major operators is under pressure, and it is recommended to focus on structural growth opportunities such as computing power and 5G-A

The Zhitong Finance App learned that according to the 2024 financial reports of the three major telecom operators, the total capital expenditure of the three companies in 2024 was 318.9 billion yuan, down 9.7% from the previous year, and the decline was 4.5% higher than the early 2024 guideline. Looking ahead to 2025, in terms of total volume, the total capital expenditure guidelines of the three operators fell 9.1% year on year to 288.9 billion yuan, and the scale of investment continued to narrow; from a structural perspective, the investment focus of operators was further skewed towards computing power networks. China Mobile/Telecom/Unicom's computing power investment increased 0.5%/22%/28% year on year, respectively. Traditional mobile & fixed network construction will enter a period of high-quality and steady development focusing on investment energy efficiency. In the future, 5G-A, 400G OTN and 50G PON upgrades are expected to drive incremental investment in wireless/wired networks.

CICC's main views are as follows:

Computing power networks: Operators pay attention to investing in computing power resources, and the scale of intelligent computing continues to expand

From a business perspective, the cloud computing revenue of the three major operators continued to grow rapidly in 2024. The year-on-year revenue growth rate of Mobile Cloud/Tianyi Cloud/Unicom Cloud was 20.5%/17.1%/34.5%, respectively, and the competitive position of operators in the public cloud market increased. On the cloud network infrastructure side, according to the operator's annual report, China Mobile/Telecom/Unicom will increase computing power investment by 0.5%/22%/28% year-on-year respectively in 2025, further focusing resources on computing power networks in the context of overall capital expenditure pressure.

According to the operator's public results conference, China Mobile said that the 2025 cumulative 34 EFLOPS computing power plan is mainly used for pre-training, and there is no upper limit on the investment of inference related resources according to market demand; China Telecom said that computing power investment is mainly used to purchase GPUs and servers, DC and AIDC investment as needed; China Unicom said it will continue to increase investment in AIDC and other related fields in 2025 and dynamically adjust the investment scale. Operators focus on computing power network construction and flexibly allocate intelligent computing investment as needed, and computing power hardware procurement demand is expected to maintain sustainable growth.

Mobile Communications & Wired Networks

1) Mobile Communications: China Mobile's 5G capital expenditure in 2025 is 58.2 billion yuan, down 15.7% year on year. China Telecom guides mobile network investment to fall 19% year on year to 24.2 billion yuan in 2025. 5G investment has already entered the middle and late stages, and the decline in 5G related capital expenditure is in line with the telecom industry's cyclical investment rules; while 5G-A, as an important upgrade of 5G networks, is expected to move to full-scale commercial stage in 2025. China Mobile plans to invest 9.8 billion yuan in 5G-A construction in 2025, an increase of 227% year on year. China Telecom and Unicom are also speeding up large-scale deployment of 5G-A. In addition, it is recommended to pay attention to the wireless technology upgrade brought about by the launch of pre-research on 6G technology.

2) Wired network: The coverage of gigabit optical networks continues to expand, the 50G PON pilot deployment boosts the launch of the 10,000 gigabit optical network, and the gradual decline of 400G OTN from backbone to provincial and metropolitan area networks, which is expected to bring opportunities for structural upgrading of wired networks.

Aspect of the target

Recommended attention: Solution providers Hikvision (002415.SZ), Dahua (002236.SZ), etc.; Ziguang (000938.SZ), Ruijie Networks (301165.SZ), ZTE (000063.SZ), Hengtong Optoelectronics (600487.SH), Zhongtian Technology (600522.SH), Guangxun Technology (002281.SZ), etc.

risk factors

Investment in information infrastructure falls short of expectations, the development of new technologies such as AI falls short of expectations, demand for 5G-A commercialization falls short of expectations, and the risk of trade and technological friction.