Core Viewpoint - The telecommunications industry is experiencing slight revenue growth and expanding user base in early 2025, with a projected upward cycle from 2019 to 2028, marking a golden period for value activation among telecom operators [1][2]. Revenue and User Growth - In January-February 2025, the telecommunications industry achieved a cumulative revenue of 295 billion yuan, reflecting a year-over-year increase of 0.9%, with growth slightly declining due to a high base in Q1 2024 and a complex macroeconomic environment [1]. - The mobile user segment has a 5G penetration rate of 58.6%, up by 1.9 percentage points from the end of the previous year, while the proportion of gigabit broadband users in the fixed network segment reached 31.7%, an increase of 0.8 percentage points [1]. Financial Performance - In 2024, the three major telecom operators reported steady revenue growth, with net profit growth consistently outpacing revenue growth, and this trend is expected to continue into 2025, showing a "front low and back high" performance trajectory [2]. - The user base is expanding, with both mobile and fixed-line ARPU remaining stable, while value-added services are anticipated to be a key driver for maintaining traditional business ARPU stability in 2025 [2]. Emerging Business Growth - The share of the industrial internet business in the total service revenue of the three major operators has been increasing, with emerging business contributions to total service revenue growth rising to 57.4%, a year-over-year increase of 7 percentage points [2]. - The DeepSeek initiative is expected to enhance resource utilization rates rapidly, leading to sustained growth in cloud and IDC businesses, alongside collaborations with internet companies to leverage AI model advancements [2]. Capital Expenditure and Cost Management - Capital expenditures for 2024 and 2025 are expected to continue a downward trend, with a structural focus shifting towards computing power, and significant growth in computing power capital expenditures is anticipated [3]. - The three major operators have achieved notable efficiency improvements, with core cost items such as depreciation, amortization, and network operation costs maintaining stable proportions relative to total service revenue [3]. Cash Flow and Dividend Distribution - Free cash flow for mobile and telecom sectors continued to grow rapidly in 2024, while China Unicom's free cash flow remained stable, reinforcing value creation capabilities [4]. - In 2024, the dividend growth rate for the three major operators outpaced net profit growth, with an overall dividend payout ratio of 71.3%, an increase of 2.1 percentage points year-over-year, and the total dividend amount accounted for 58.7% of free cash flow [4]. - Accounts receivable increased due to B-end business expansion, but most accounts receivable are within a one-year aging period, and improved management in 2025 is expected to release overall business cash flow [4].