China Telecommunications Q4 2018
We have revised upward our mobile growth forecast, based on positive data from the regulator and the operators and wehave also increased our 3G/4G outlook for the same reason. While 3G subscriptions will gradually decline, we forecast strong growthfor 4G. Similarly, we believe that broadband growth will be stronger than we previously forecast. The ICT sector is integral to China's13th five-year plan (2016-2020) and will stimulate growth in other industries. While the plan lays out ambitious broadband targets,profitability in the telecoms sector will be largely undermined by the state-owned operators' need to compress prices to meet them.Nonetheless, local IT and consumer electronics companies will gain from a higher budget for R&D (2.1% of GDP to 2.5%) andreduced reliance on imports for high-tech inputs.
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