(Yicai) March 27 -- China’s three biggest telecoms operators, China Mobile, China Unicom, and China Telecom, shifted their investment focus from fifth-generation network infrastructure to cloud computing services, which is the key to telecoms carriers’ digitization transformation and upgrading.

China Telecom invested a total of CNY98.8 billion (USD13.7 billion) last year, of which CNY35.5 billion went into industrial digitization, up 64 percent from the previous year, according to the Beijing-based company’s latest annual report. It did not specify the proportion of investment toward 5G.

In 2022, China Telecom’s investment totaled CNY92.5 billion, of which CNY31 billion was spent on 5G-related fields and only CNY21.7 billion on industrial digitization.

Revenue at China Telecom’s affiliated cloud services arm Tianyi surged 68 percent to CNY97.2 billion last year from the year before.

China Mobile reported a capital-related expenditure of CNY73.9 billion last year. The company noted in its financial statement that with the gradual improvement in 5G coverage, its investment focus shifted from telecommunications and networks’ connectivity towards computing power and digital intelligence.

China Mobile had earlier disclosed that last year it would have reduced its investment in 5G networks by about 20 percent to CNY69 billion, while hiking its budget for computing power and corresponding capacity and infrastructures spending.

China Mobile logged CNY83.4 billion in revenue from cloud services last year, up 66 percent from the year before. Meanwhile, China Unicom’s revenue from such business rose 42 percent to CNY51 billion in the period.

Telecoms carriers’ digital transformation business accounted for over 50 percent of their overall revenue growth, reflecting their increased interest in special-purpose networks, industrial digitization, cloud services, and computing power, said Li Hongtao, chief analyst at Huajin Securities.

In the future, smart driving, the low altitude economy, and the internet of satellites will all enter a stage of industrial application, which will create great opportunities for network upgrading, Li noted. Telecoms carriers’ investment in cloud computing networks and services will more than double or even triple this year, he predicted.

The market share of China Mobile’s cloud services in China rose 75 percent, moving one spot to fifth place, according to a report tracking the country’s public cloud service market released by the International Data Corporation. Meanwhile, the market share of Alibaba Cloud dropped 5.8 percent, with the freed space being then occupied by Huawei Technologies, Tianyi, and China Mobile.

Editor: Futura Costaglione