Marbridge Daily

China's Number of Value-added Telecom Service Enterprises Exceeds 77,200

CAICT, 12/12/19

As of the end of November 2019, China's total number of enterprises holding a value-added telecommunications service license reached 77,234, up 2.25% 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, 18,898 were cross-regional enterprises licensed by the MIIT, up 2.30% MoM, and 58,336 were local enterprises licensed by provincial (regional, municipal) communications administrations, up 2.23% MoM.

Regionally, China's value-added telecommunications industry is currently characterized by uneven development. Among the 18,898 cross-regional enterprises, 4,728 are registered in Beijing, 3,869 in Guangdong, and 1,870 in Shanghai, for a combined total of 55.4%.

Among the 58,336 local enterprises, 12,100 are registered in Beijing, 7,171 in Guangdong, and 6,487 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 17.5% of the total, meaning that 61.7% 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 12.2% 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 77,234 value-added telecommunications companies have a total of 96,883 licensed projects. Among them, 45,336 (or 46.79% of the total) are Internet information service projects, 15,632 (16.13%) are non-Internet information service projects, 12,994 (13.41%) are online data processing and transaction processing services, 10,224 (10.55%) are domestic call center services, 5,680 (5.86%) are Internet access provision ("ISP") services, 3,104 (3.20%) are Internet data center ("IDC") services, and 3,913 (4.04%) are other businesses.

In terms of the main service categories provided by China's 18,898 cross-regional value-added telecommunications service enterprises, the top three were non-Internet information services (11,008 operators), domestic call center services (7,927 operators), and Internet access services (3,563 operators).

The range in the amount of registered capital across China's 18,898 cross-regional value-added telecommunications service enterprises is substantial, but with the majority (69.5%) clustered at RMB 10 mln. Those with registered capital greater than RMB 10 mln but less than RMB 50 mln comprised 17.4%, those with RMB 50 mln to RMB 100 mln comprised 7.1%, 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 November 2019, among China's 18,898 cross-regional value-added telecommunications service enterprises, 716 (3.8%) were state-owned, 18,048 (95.5%) were privately held, and 134 (0.7%) were foreign-invested enterprises.

This Month's Featured Sub-sector: Online Data Processing and Transaction Processing

As of the end of November 2019, there were a total of 12,994 companies holding online data processing and transaction processing business licenses in China, among which 86 were cross-regional enterprises licensed by the MIIT and 12,908 were local enterprises licensed by provincial (regional, municipal) communications administrations. Other than for foreign-invested enterprises, licenses for the majority of companies in this sector are issued mainly by provincial communications administrations, in line with China's move to localize oversight of e-commerce-related enterprises.

Online data processing and transaction processing enterprises focus mainly on serving e-commerce platforms. In 2018, total goods and service e-commerce transaction value in China was RMB 30.61 trln, up 14.5% YoY. Broken down by region, eastern China accounted for the largest proportion of China's total e-commerce transaction value, while northeast China had the highest growth rate. The transaction value of goods and services in eastern China was RMB 19.90 trln, up 14.1% YoY, and accounting for 65.0% of the total; transaction value in central China was RMB 5.34 trln, up 15.7% YoY, and accounting for 17.5%; transaction value in western China was RMB 4.32 trln, up 12.5% YoY, and accounting for 14.1%; and transaction value in northeast China was RMB 1.05 trln, up 25.2% YoY, and accounting for 3.4%.

The growth rates of e-commerce transaction value for both goods and services slowed in 2018. Total 2018 goods e-commerce transaction value in China reached RMB 24.33 trln, up 12.9% YoY, representing an 8.1 percentage point drop in the growth rate compared to that of 2017; total services e-commerce transaction value was RMB 6.28 trln, up 21.1% YoY, representing a 14.0 percentage point drop in the growth rate.

Broken down by B2C/C2C and B2B, total B2C/C2C e-commerce transaction value in China in 2018 reached RMB 11.18 trln, up 23.6% YoY, representing a 9.5 percentage point drop in the growth rate over the previous year; total 2018 B2B e-commerce transaction value came to RMB 19.43 trln, up 9.9%, representing an 8.7 percentage point drop in the growth rate.

Keywords: wireless B2B e-commerce Internet telecom B2C C2C MIIT call center Internet access Internet data center value-added data processing ISP CAICT private investment GMV national statistics