China’s government has reclassified mobile data, broadband access, SMS and MMS as basic telecom services, raising the VAT rate from 6% to 9%. HSBC estimates the hike will reduce China Mobile’s 2026 net profit by 6%, China Telecom’s by 12% and China Unicom’s by 13%, with overall earnings for operators falling 6% to 13%. The change is expected to affect mobile operators’ revenue streams significantly in 2026.
The VAT rate will increase to 9% from the previous 6% for mobile data, broadband access, SMS and MMS.
HSBC estimates a 6% decline in China Mobile’s 2026 net profit due to the VAT hike.
China Unicom is projected to see a 13% decline, China Telecom a 12% decline, and China Mobile a 6% decline in 2026 net profit.
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