With the full disclosure of China Mobile's 2025 annual report, the performance and underlying concerns of its government and enterprise business, regarded as the "second curve" of transformation, have come to the forefront. In 2025, revenue from the government and enterprise customer segment reached 240.4 billion yuan, representing a year-on-year increase of 6.1%. While this growth rate remains relatively strong within the overall telecommunications market, it has noticeably slowed compared to the double-digit growth seen in previous years, raising industry concerns about the sustainability of the government and enterprise business.
On the surface, the slowdown in growth is a natural outcome of an expanding base; as the scale of government and enterprise operations increases annually, maintaining past high growth rates inevitably becomes more challenging. However, a deeper analysis suggests that this deceleration reflects structural bottlenecks in the government and enterprise business model, particularly the increasingly prominent contradiction between cash flow and profitability.
More worryingly, while growth is slowing, risk indicators are trending upward at an accelerating pace. Financial report data shows that China Mobile's government and enterprise receivables balance reached 108.7 billion yuan, a year-on-year increase of 32.8%, significantly higher than the revenue growth rate. This indicates that the amount of funds required to be advanced for every 100 yuan of revenue earned is expanding, pointing to a clear decline in capital turnover efficiency.
The aspect that truly warrants caution is the bad debt risk associated with these accounts receivable. In 2025, the bad debt provision for government and enterprise customer receivables increased from 29 billion yuan to 34.4 billion yuan, a year-on-year rise of 18%. This growth rate is significantly higher than the business growth rate, indicating an increase in the risk coefficient of the government and enterprise segment.
It is noteworthy that China Mobile's management has recognized this underlying concern. In 2025, the company explicitly optimized its provisioning methodology. In response to the growth in scale and increasing diversification of the government and enterprise customer base, it further strengthened the lean management of receivables, refined the segmentation of receivable portfolios, separately calculated probability-of-default loss rates, and optimized aging analysis methods, presenting a comprehensive expected credit loss rate. This adjustment in accounting treatment reflects management's recognition of and response to changes in the risk structure of the government and enterprise business.
This shift indicates that the telecom operator's government and enterprise strategy is evolving from a pure pursuit of scale growth towards a greater focus on risk control and quality improvement. This transition represents a significant adjustment in development strategy and a necessary adaptation to changes in the market environment.
The difficulty in collecting payments from government and enterprise clients is not merely a financial issue but a manifestation of deeper structural contradictions. This challenge primarily stems from three conflicts:
The first conflict lies between the inertia of performance evaluation mechanisms and the needs of risk management. Under the SASAC's policy guidance emphasizing "stable growth," the evaluation systems for local branches still primarily focus on revenue scale. This drives grassroots units to favor undertaking large-scale integrated projects requiring significant upfront funding and featuring slow repayment cycles to quickly boost revenue. However, these projects often have long cycles and large investments, with collection facing significant uncertainty, creating a direct conflict with risk management requirements. The tendency to prioritize scale over risk is a key reason for the continuous rise in receivables.
The second conflict exists between shortcomings in product capabilities and the needs of business transformation. The current structure of government and enterprise business is overly reliant on customized integration projects, with a lack of standardized products. Such projects typically require substantial upfront investment from the operator, and repayment is highly dependent on project acceptance progress and downstream fiscal appropriation processes, leaving the operator with little control. An ideal business structure would emphasize platform-based, standardized products and services, creating value through a "light-asset, fast-collection" model. However, operators still face capability gaps in core technologies like cloud computing, big data, and artificial intelligence, making it difficult to offer sufficiently competitive standardized products. This forces continued reliance on capital-intensive integration projects to maintain growth, creating a difficult cycle to break.
The third conflict involves pressure from the customer structure and the requirements for financial health. In recent years, funding constraints for some local government platform companies have made payment delays commonplace. As a key customer segment, fluctuations in the fiscal health of local governments directly impact the operator's cash flow security. Changes in local government fiscal conditions have become a significant external factor exacerbating risks in the government and enterprise business.
Faced with the scale trap of the government and enterprise business, operators have begun implementing measures to control risks and optimize structure. In 2025, industry reports suggested that one operator internally mandated "zero growth for receivables aged over one year," indicating that management is taking proactive, potentially painful, steps to curb the spread of long-aged assets. By setting strict targets, business units are compelled to place greater emphasis on repayment terms during project selection and contract negotiations, controlling risk at the source.
High accounts receivable are indeed a transitional phenomenon during the operator's transformation, but this should not be an excuse for allowing risk to accumulate unchecked. The key is to transform this "cost of growth" into a "lever for development"—that is, through scientific management and innovative models, ensuring that receivables are not simply a financial burden but a lever for building long-term, deep cooperative relationships with clients.
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