Marbridge Daily

China's Number of Value-added Telecom Service Enterprises Exceeds 75,100

CAICT, 10/16/19

As of the end of September 2019, China's total number of enterprises holding a value-added telecommunications service license reached 75,155, up 2.01% month-on-month, reports the China Academy of Information and Communications Technology (CAICT), a department of China's Ministry of Industry and Information Technology (MIIT). Of this total, 17,973 were cross-regional enterprises licensed by the MIIT, up 3.67% MoM, and 57,182 were local enterprises licensed by provincial (regional, municipal) communications administrations, up 1.50% MoM.

Regionally, China's value-added telecommunications industry is currently characterized by uneven development. Among the 17,973 cross-regional enterprises, 4,595 are registered in Beijing, 3,654 in Guangdong, and 1,794 in Shanghai, for a combined total of 55.9%.

Among the 57,182 local enterprises, 11,516 are registered in Beijing, 6,787 in Guangdong, and 5,983 in Zhejiang, comprising a combined 42.5% of the nation's total local value-added telecom service enterprises. The next largest concentrations are in Jiangsu, Sichuan, and Shanghai, which, combined, comprise another 17.9% of the total, meaning that 60.4% of China's local value-added telecommunications companies are concentrated in these 6 provinces; in contrast, the combined number of local value-added telecommunications enterprises spread out across China's 12 western provinces accounted for only 13.4% of the country's total.

According to the value-added telecommunications service classification in the 2015 edition of China's Telecommunication Service Catalogue, China's 75,155 value-added telecommunications companies have a total of 92,593 licensed projects. Among them, 43528 (or 47.01% of the total) are Internet information service projects, 15,596 (16.84%) are non-Internet information service projects, 11,338 (12.24%) are online data processing and transaction processing services, 10,085 (10.89%) are domestic call center services, 5,445 (5.88%) are Internet access provision ("ISP") services, 2,891 (3.12%) are Internet data center ("IDC") services, and 3,710 (4.01%) are other businesses.

In terms of the main service categories provided by China's 17,973 cross-regional value-added telecommunications service enterprises, the top three were non-Internet information services (10,476 operators), domestic call center services (7,699 operators), and Internet access services (3,312 operators).

The range in the amount of registered capital across China's 17,973 cross-regional value-added telecommunications service enterprises is substantial, but with the majority (69.1%) clustered at RMB 10 mln. Those with registered capital greater than RMB 10 mln but less than RMB 50 mln comprised 17.6%, those with RMB 50 mln to RMB 100 mln comprised 7.2%, and those with RMB 100 mln or more comprised 5.7%. A small percentage (0.3%) had registered capital of less than RMB 10 mln.

Currently, the sources of investment and financing in China's value-added telecommunications field have become increasingly diversified, and private capital has developed into a major force. As of the end of September 2019, among China's 17,973 cross-regional value-added telecommunications service enterprises, 635 (3.5%) were state-owned, 17,216 (95.8%) were privately held, and 122 (0.7%) were foreign-invested enterprises.

As of the end of September 2019, China had issued internet access service (i.e. internet service provider or "ISP") licenses to 5,445 enterprises, of which 3,312 were issued by the Ministry of Industry and Information Technology, and 2,133 were issued to regional enterprises by their respective provincial communications administrations. Regionally, China's ISP industry is currently characterized by highly uneven development, with a heavy concentration of the MIIT-licensed ISP enterprises registered in Beijing, Guangdong, and Shanghai, and, to a considerably lesser degree, in Shandong, Zhejiang, Henan, Hebei, and Jiangsu. Locally-licensed ISP enterprises are also heavily concentrated in Beijing, Shanghai, and Guangdong, and to a lesser degree in Shandong, Zhejiang, Henan, Hebei, Jiangsu, and Tianjin.

In 2018, China's ISP industry generated revenues of RMB 35.0 bln, up 4.4% YoY. Of this total, revenue from enterprises with an MIIT-issued ISP license accounted for 52.5%, and revenue from enterprises with a provincial communications administration-issued license comprised 47.5%.

Keywords: wireless Internet license telecom MIIT call center Internet access Internet data center value-added data processing ISP CAICT private investment national statistics