Marbridge Daily

China's Number of Value-added Telecom Service Enterprises Exceeds 75,500

CAICT, 11/14/19

As of the end of October 2019, China's total number of enterprises holding a value-added telecommunications service license reached 75,538, up 0.51% 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, 18,473 were cross-regional enterprises licensed by the MIIT, up 2.78% MoM, and 57,065 were local enterprises licensed by provincial (regional, municipal) communications administrations, down 0.20% MoM.

Regionally, China's value-added telecommunications industry is currently characterized by uneven development. Among the 18,473 cross-regional enterprises, 4,659 are registered in Beijing, 3,764 in Guangdong, and 1,841 in Shanghai, for a combined total of 55.6%.

Among the 57,065 local enterprises, 11,865 are registered in Beijing, 6,973 in Guangdong, and 6,374 in Zhejiang, comprising a combined 44.2% 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 17.6% of the total, meaning that 61.8% 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 12.1% 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 75,538 value-added telecommunications companies have a total of 94,764 licensed projects. Among them, 44,393 (or 46.85% of the total) are Internet information service projects, 15,415 (16.27%) are non-Internet information service projects, 12,352 (13.03%) are online data processing and transaction processing services, 10,179 (10.74%) are domestic call center services, 5,562 (5.87%) are Internet access provision ("ISP") services, 3,006 (3.17%) are Internet data center ("IDC") services, and 3,857 (4.07%) are other businesses.

In terms of the main service categories provided by China's 18,473 cross-regional value-added telecommunications service enterprises, the top three were non-Internet information services (10,729 operators), domestic call center services (7,874 operators), and Internet access services (3,452 operators).

The range in the amount of registered capital across China's 18,473 cross-regional value-added telecommunications service enterprises is substantial, but with the majority (69.3%) clustered at RMB 10 mln. Those with registered capital greater than RMB 10 mln but less than RMB 50 mln comprised 17.5%, 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 October 2019, among China's 18,473 cross-regional value-added telecommunications service enterprises, 678 (3.7%) were state-owned, 17,671 (95.6%) were privately held, and 124 (0.7%) were foreign-invested enterprises.

This Month's Featured Sub-sector: Call Centers

As of the end of October 2019, China had 10,179 licensed call center enterprises, among which 7,874 were cross-regional enterprises licensed by the MIIT and 2,305 were local enterprises licensed by provincial (regional, municipal) communications administrations.

According to the MIIT's 2018 China Communications Industry Statistical Report, domestic call center revenues grew 51.6% YoY in 2018 to reach RMB 43.9 bln. Of this total, RMB 30.5 bln came from cross-regional enterprises, up 67.5% YoY, and RMB 13.4 bln came from local enterprises, up 24.7% YoY.

The 2018 report data also shows that the number of traditional (manual) call center seats has begun to shrink. China's total number of call center seats in 2018 was 364,000, among which cross-regional enterprises accounted for 246,000 and local enterprises accounted for 118,000. In 2018, smart voice technology saw increasingly brisk uptake in the call center industry, resulting in a reduction of 161,000 traditional seats compared with 2017. As smart voice technology continues to mature and labor costs rise, the number of traditional seats is expected to see a steady decline.

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