China Telecom, the state owned fixed-line operator, has released its latest five-year plan detailing the company’s move into emerging markets.
The change comes as China Mobile, the state owned mobile operator, starts to encroach on China Telecom’s business. More Chinese customers, especially the younger generation, are skipping fixed-line telephones and broadband for cheaper mobile contracts.
To remain relevant, China Telecom plans to transform the business into an “integrated information service provider”, focused on artificial intelligence, cloud computing, big data, the Internet of Things, mobile.
The state-owned enterprise already provides service to all five focus markets, according to Nikkei. The network’s Internet of Things (IoT) service reached three million connections and its mobile payments platform, BestPay, surpassed eight millions users.
Neither of those are particularly massive numbers, but China Telecom has faith that in the next five years, the five focus areas will make up 60 percent of the company’s revenue.
China Telecom faces big domestic competition
China Telecom has been in the fortunate position of zero competition in the fixed-line market, but will find it much harder to stake a claim in the artificial intelligence or cloud computing market, where major tech firms Baidu, Alibaba, and Tencent are spending millions.
Yang Jie, the CEO of China Telecom, revealed that its cloud division had seen a 41 percent rise in revenue this year, but it did not provide numbers for artificial intelligence or big data businesses.
Companies outside China might not be confident in China Telecom as a data center or networking provider, because of its ties to the government. This is especially true for U.S. tech firms, which have received cyber attacks from hackers connected to the state.
The lack of foreign partners is not likely to hurt China Telecom though, due to its connections inside the country with tech firms.