China’s telecoms operators face ‘high capital spending’ under nation’s 13th Five-Year Plan

China’s aggressive target to become a world-leading “digital country” by 2020 may entail a significant increase in capital spending and accelerated infrastructure roll-out for its three major telecommunications network operators over the next few years.

Citing a new, 26-page report of that plan published by the State Council last week, Jefferies equity analyst Edison Lee said telecommunications services will be used to spur growth in the overall economy and improve government efficiency.

“It states clearly in the plan that the promotion of high-speed internet, big data, cloud computing and Internet of Things aims to help upgrade China’s manufacturing capabilities, agricultural sector, medical services, environmental efforts and even the government’s ability to govern,” Lee said.

The term “informatisation” refers to the extent by which a geographic area or economy is becoming information-based through the areas of telecommunications, media and technology, also known as “TMT” by international investors.

Lee said China’s goal to develop into one of the world’s leading digital countries would need “a very high level of internet usage by the general public in every aspect of life, intensive use of information technology by various industries, and extensive offerings of online and electronic services by the government”.

A study published by Accenture last year identified the United States as “the world’s most digital economy, with existing digital investments accounting for 33 per cent of its [gross domestic product]”.