The competition among China’s three major telecom operators in the realm of AI technology is intensifying as they announce their integration with the groundbreaking AI model, DeepSeek.
At the commencement of 2025, China Telecom, China Mobile, and China Unicom all declared their comprehensive adoption of DeepSeek, stirring significant interest in the fusion of telecommunications and artificial intelligence. According to a report by Galaxy Securities, these telecom giants are leveraging their platform strengths and resource advantages to promote DeepSeek across various scenarios and products, injecting vigorous momentum into the development of accessible AI. This event not only illustrates the operators' proactive approach in embracing new technologies but also foreshadows the acceleration of intelligent transformation within the telecommunications sector.
DeepSeek, an open-source model known for its robust performance and ability to significantly reduce training and inference costs, has captured the attention of the three major telecom operators. Reports indicate that these operators aim to enhance network management efficiency and customer service quality by utilizing DeepSeek’s deep learning capabilities and its adaptability across various scenarios. As highlighted in Galaxy Securities' analysis, the operators possess the largest national traffic channels and vast data accumulation, alongside a high penetration rate in cloud business hardware. These factors position DeepSeek's full incorporation to potentially expedite the growth of AI applications and sustain cloud business expansion.
In this context, the strategic frameworks of the trio are not merely technological innovations; they are forward-looking adjustments to future market competitiveness. By collaborating closely with DeepSeek, operators can achieve breakthroughs in network optimization, intelligent customer service, and personalized services, thus solidifying their leading status in the telecom industry. This move reflects the telecom operators' profound commitment to AI technology in their digital transformation journeys and their determination to seize opportunities in the emerging technological wave.
What exactly can the operators do with DeepSeek? Which company is leading the industry?
The expansive and intricate networks of telecom operators present a range of challenges in troubleshooting and repair, which are often time-consuming and labor-intensive.
With the comprehensive integration of DeepSeek, the operators can conduct real-time monitoring and analysis of network equipment operational data leveraging its deep learning capabilities. DeepSeek constructs complex models that can evaluate multi-dimensional data, such as anomalies in network traffic and temperature variations of devices, to accurately determine the probability and timing of potential failures, enabling predictive maintenance before issues arise.
For instance, when there is a significant fluctuation in network traffic alongside a device exceeding its normal temperature range, DeepSeek can swiftly assess the risks of equipment failure. This allows operators to execute preventive maintenance before an outage occurs, dramatically reducing downtime and enhancing network stability. As noted in the Galaxy Securities report, the operators' significant data reservoirs and expansive traffic channels provide a solid foundation for DeepSeek to achieve intelligent fault predictions.
Efficient allocation of network resources is crucial for ensuring user experience. DeepSeek can dynamically adjust network resources based on real-time data and user demands. During peak video streaming times, when users require more bandwidth, DeepSeek allocates additional resources to video services, ensuring a seamless viewing experience. Conversely, during nighttime when user demand is comparatively lower, it reallocates resources for network optimization and maintenance. This intelligent resource allocation not only enhances the utilization of network resources and mitigates waste but also enriches users' experiences in diverse scenarios.
In the modern telecommunications industry, the quality of customer service directly impacts user satisfaction and loyalty. After integrating DeepSeek, the three major operators can significantly enhance their customer service quality through optimized intelligent customer service systems and personalized service recommendations.
Additionally, the implementation of personalized service recommendations represents another crucial initiative for the operators to improve user experience. By leveraging DeepSeek's comprehensive analysis of user data, they can create accurate user profiles and offer tailored recommendations based on consumption habits, usage preferences, and online behaviors.
For example, operators can recommend high-definition video subscription packages to users who frequently engage in video services, while suggesting suitable nationwide data packages for users who travel often. Such personalized offerings not only boost user satisfaction with the operators' services but also promote business engagement and increase revenue streams. Galaxy Securities' analysis further emphasizes that operators with the largest traffic channels and data reserves can leverage DeepSeek to accelerate application development, providing a firm foundation for the widespread adoption of personalized service recommendations.
Within the context of the comprehensive integration of DeepSeek, the convergence of AI and 5G technologies is poised to become a significant direction for new business expansion. The high speed and low latency attributes of 5G provide a broad platform for AI applications. In smart manufacturing, for instance, operators can transmit factory equipment data in real-time to the DeepSeek platform via 5G networks for analysis, optimizing production processes and enhancing both efficiency and product quality. This intelligent production management not only minimizes the need for human intervention but also allows for refined management through real-time data analysis.
Similarly, the field of intelligent transportation benefits greatly from the integration of AI and 5G. Operators utilize the low-latency characteristics of 5G to support automated driving assistance systems, facilitating smart traffic regulation. This not only enhances the overall efficiency of the transportation system but also improves safety and convenience for travelers.
Based on disclosed financial reports, it is clear that in terms of computational power or capital expenditure on digital transformation in 2023, China Mobile leads with an investment of 45.2 billion yuan, marking a 35% year-on-year increase. Meanwhile, in the first half of 2024, its digital transformation revenue reached 147.1 billion yuan, up 11% year-on-year. China Unicom spent 14.9 billion yuan in 2023 on comparable capital, with a growth of 20%; its industrial internet revenue in the first half of 2023 reached 43 billion yuan, making up over 25% of its main revenue. China Telecom allocated 38 billion yuan in 2023 for digital transformation, achieving a 40% increase, and its Tianyi Cloud revenue in the first half of 2023 was 45.9 billion yuan, growing by 63.4%.
The data indicates that China Mobile is undoubtedly the leader among the three telecom operators regarding R&D investment, allocating hundreds of billions of yuan in AI, showcasing its ambition in technological innovation. However, China Telecom and China Unicom exhibit unique growth strategies with comparatively smaller investment scales. China Telecom's significant investments focus on AI security and cloud network integration, while China Unicom is amplifying its efforts in the Internet of Things (IoT) and big data applications. This differentiated investment strategy establishes diverse development paths in AI for the three operators.
In terms of technological innovation, China Mobile enhances its network fault prediction and intelligent customer service applications through extensive computational infrastructure and algorithmic development. China Telecom focuses on developing AI security technologies, creating intelligent security protection systems to bolster network security and cloud service efficiency. Meanwhile, China Unicom has made notable progress in the intelligent management of IoT devices and big data analytics, improving operational efficiency and data valuation capabilities. This diversity in technological innovation reflects competitive dynamics and cooperative opportunities across various application domains among the three operators.
Significantly, China Mobile has established a strong brand image through its comprehensive business coverage and technological innovation. China Telecom solidifies its brand advantage by excelling in secure communication domains, and China Unicom enhances brand recognition through innovative applications in IoT. Although the market influence of the three operators varies, they are actively leveraging AI technology to bolster their market competitiveness.
Looking ahead, the three major telecom operators face both opportunities and challenges in the AI arena. China Mobile must continue to maintain its leading position in technological innovation and market influence, while China Telecom and China Unicom should intensify investments in their respective strengths to tackle challenges posed by market competition and technological transformation. Through continual technological innovation and market expansion, all three operators are expected to sustain competitiveness in the future communications industry.
A multi-dimensional analysis reveals that the different strategies adopted by the three major operators in AI R&D investment provide robust developmental momentum in their respective superiority fields. Despite facing challenges, the operators can anticipate significant success in future market competition through strategic positioning and ongoing technological innovation.
As deep learning and reinforcement learning technologies continue to evolve, their performance and scope of application will expand. In the future, AI technology will increasingly emphasize integration with other frontier technologies such as blockchain and quantum computing, achieving more powerful functionalities. In terms of model architecture, more efficient and lightweight models will continue to emerge to accommodate various scenario requirements, while AI's capabilities in processing complex data and solving intricate problems will also enhance, unlocking numerous innovative application possibilities across various industries.
The telecommunications industry stands at a pivotal juncture, transitioning from traditional communication services to digital and intelligent service models. As the 5G network becomes ubiquitous, user expectations for telecommunication services extend beyond mere voice and data transmission, focusing more on personalized and intelligent service experiences. Operators must leverage AI technology to realize intelligent network management and customized services to satisfy users’ growing demands and enhance their competitive edge in the market.
In this context, the comprehensive adoption of DeepSeek by the three major operators signifies a significant advancement in the application of AI technology within the telecommunications industry. Galaxy Securities points out that integrating DeepSeek not only enhances the prevalence of AI technology but also markedly reduces training and inference costs, providing a robust technological support for the intelligent transformation of the telecommunications sector. By harnessing DeepSeek's formidable capabilities and broad application range, operators can optimize their network resource allocation, improve service quality, and subsequently drive continuous growth in cloud computing businesses.
Moreover, as AI technology becomes more deeply entrenched within the telecommunications sector, operators will be capable of more accurately analyzing user behaviors and offering more tailored service plans. This transformation will not only enhance user satisfaction and loyalty but can also unveil new business growth opportunities for operators. Looking ahead, the maturation of AI technologies and the expansion of application scenarios will present further opportunities and challenges for the intelligent transformation of the telecommunications industry.
The operators confront both opportunities and challenges in advancing AI development. From the opportunity perspective, their vast user data and extensive network infrastructure offer undeniably unmatched advantages. As noted in Galaxy Securities' report, operators possess the largest national traffic channels and significant data accumulation along with robust cloud business hardware foundations and broad service dissemination.
By leveraging AI technologies such as DeepSeek, operators can extract the latent value within this data, leading to the creation of more personalized, intelligent service products tailored to user needs. In burgeoning fields such as 5G and the Internet of Things, the integration of AI technologies is expected to open new business growth avenues for the operators. For example, the high-speed and low-latency characteristics of 5G combined with AI can birth diverse application scenarios such as smart factories and intelligent transportation, thereby boosting competitors' standing in the industry.
However, operators also face numerous challenges on the path of AI development. The rapid evolution in AI technology necessitates that operators consistently invest in research and development to keep pace with industry advancements. At present, intense market competition entails that operators must contend not only with rival telecom companies but also face formidable challenges from internet technology giants like Alibaba and Baidu in the AI application arena.
It is essential to stress that issues related to data security and privacy protection cannot be overlooked. Given that operators possess vast amounts of user data, any data security incidents could have severe repercussions. Thus, establishing a comprehensive data security management system to ensure users’ data safety is a critical challenge that operators must address as they develop AI capabilities.