Industry Trends. Recently, China Mobile, China Unicom, and China Telecom respectively announced customer operation data for December 2023, and the cumulative number of China Unicom's "big connection" users reached 98.8 billion households, with a cumulative number of 5G** users reaching 2600 million households, and the cumulative number of IoT terminal connections has reached 49.4 billion households; The total number of mobile service customers of China Mobile is 99.1 billion households, with 7 5G** customers9.5 billion households; The number of China Telecom's mobile subscribers is 40.8 billion households, and the number of 5G** users reached 31.9 billion households.
Key takeaways. 
In 2023, the number of wired broadband customers of China Mobile and China Telecom will increase by 2,607 respectively80,000 households and 9.26 million households. Although operators have not disclosed the changes in the ARPU value of 5G users, considering that the growth rate of ARPU value of the three major operators in 2022 is less than 1%, and the ARPU value of users has not been significantly improved during the peak period of 5G network construction, we believe that with the technological innovation of enterprise-level Internet of Things, especially with operators continuing to invest in computing power networks, the layout of enterprise cloud terminals and computing power terminals is expected to further release the dividends of 5G networks.
In 2023, operators' capital expenditure will be stable, and it is expected that the focus will be on 5G and computing power network construction in 24 years. Considering that the capital expenditure of operators is mainly divided into several major sectors: operation network construction, digital second curve business, infrastructure and system maintenance support, of which the capital expenditure based on operation network construction and digital second curve business accounts for more than 75%.
It is estimated that in 2024, 5G investment will still be the focus in the network construction sector, and in network construction, 5G investment will still be the focus, followed by FTTR broadband network investment and construction; In the field of digital business, the main equipment server will be the main part of capital expenditure, especially the AI computing power server, and at the same time, the cloud network terminals, computing power terminals and other pan-terminals extended from the computing network will also be an important direction for the operator's layout. According to the "Communications Industry News", the key areas of capital expenditure of the three major operators in 2024 are 5G, optical fiber and cable, computing power, FTTR, and cloud computing power terminals, and the total capital expenditure will increase by about 2% to 3% year-on-year, or about 366 billion yuan.
Investment strategy. In 2023, the number of 5G** mobile subscribers of the three major operators will increase steadily, and we believe that the penetration rate of 5G customers will further increase in 2024, and with the further deployment of operators' digital services in the "second curve", the services of operators are expected to continue to maintain stable growth in 2024, and we will continue to pay attention to investment opportunities in related companies.
Reference**: January 24, 2024 Minsheng** 2023 Operator Customer Data Comments: 5G users continue to penetrate, and 5G network construction is still the focus in 24 years.
Special Disclaimer: The content of the article is for reference only and does not constitute investment advice. Investors act accordingly at their own risk.
This article is edited by investment consultant: Shang Yaxiong a1290623030001.