Key Takeaways:
Shares of China Telecom Corp. (0728.HK) surged 5.45% to close at HKD$5.61 in Hong Kong trading after the company announced the launch of trial commercial artificial intelligence “Token” subscription plans.
The launch reflects a broader push by Chinese telecom giants to capitalize on surging demand for AI services, turning computing power into a utility-style service. “The plans mark a shift in how China's telecom sector hopes to profit from generative AI, as operators attempt to transform computing power and AI model access into a utility-like service resembling traditional mobile data packages,” according to a report from China Daily.
China Telecom’s new offerings are structured in tiers for different users. For individual and household customers, plans start at 9.9 yuan ($1.40) per month for 10 million tokens, while packages for developers and small businesses begin at 39.9 yuan ($5.50) for 15 million tokens. Tokens are the basic units used to process text and images in generative AI systems, effectively acting as a billing metric for computing power.
This strategic shift from selling data traffic to offering computing power services could unlock significant new revenue streams for the nation's telecom operators. The move places China Telecom in direct competition with its rivals, who have recently launched similar products. China Mobile (00941.HK) and China Unicom (00762.HK) also saw their stocks rise on the news, gaining 0.52% and 3.5% respectively, outperforming the broader Hang Seng Index which was down for the day.
The initiative follows a move by Shanghai Telecom, a China Telecom subsidiary, which began offering token-based services days earlier. Meanwhile, China Mobile has partnered with Tencent to introduce an AI-native workspace and allows users to pay for tokens through their phone bills, signaling an aggressive push to integrate AI services into their existing customer ecosystems. The developments come as the USD/CNH exchange rate remains a key focus for investors in Chinese assets.
This article is for informational purposes only and does not constitute investment advice.
