Operating Revenue

12 Months Ended

Dec. 31, 2020

4	OPERATING REVENUE


	2020 Million		2019 Million		2018 Million
Revenue from telecommunications services
Voice services		78,782		88,624		108,083
Data services
-SMS & MMS		29,485		28,648		28,800
-Wireless data traffic		385,679		384,999		383,297
-Wireline broadband		80,808		68,835		54,285
-Applications and information services		101,038		82,543		75,701
Others		19,900		20,743		20,741

		695,692		674,392		670,907
Revenue from sales of products and others		72,378		71,525		65,912

		768,070		745,917		736,819

The majority of the Group’s operating revenue is from contracts with customers, and the remaining is not material. The revenue recognition policy has been disclosed in note 2(r), while majority of the Group’s revenue from contracts with customers was recognized over time.

(a)

Assets related to contracts with customers

The Group has recognized the following assets related to contracts with customers:


	Note	As of December 31, 2020 Million			As of December 31, 2019 Million
Contract assets	(i)		5,401			6,567
Less: current portion			(3,841	)		(5,003	)

Non-current portion recorded in other non-current assets			1,560			1,564
Contract costs recorded in other non-current assets	(ii)		14,487			15,987

Total other non-current assets related to contracts with customers			16,047			17,551

Note:

(i)

Changes in contract assets:


	Contract assets
	2020 Million			2019 Million
Gross carrying amount:
As of January 1		6,883			6,831
Increase resulting from satisfaction of performance obligation		6,948			6,886
Transfer to accounts receivable		(8,185	)		(6,834	)

As of December 31		5,646			6,883

Loss allowance:
As of January 1		(316	)		(342	)
Changes during the year		71			26

As of December 31		(245	)		(316	)

Net book value:
As of December 31		5,401			6,567

As of December 31, 2020, contract assets mainly included contract assets arising from the sales of bundled packages which includes terminals and services amounting to RMB2,607 million (as of December 31, 2019: RMB6,019 million), and contract assets arising from the provision of system integration and engineering services amounting to RMB2,794 million (as of December 31, 2019: RMB548 million).

(ii)

Changes in contract costs


	Contract costs
	2020 Million			2019 Million
As of January 1		15,987			6,975
Addition		18,534			24,149
Amortization for the year		(20,034	)		(15,137	)

As of December 31		14,487			15,987

Contract costs primarily include sales commissions payable to third party agents and contract fulfilment costs for the provision of telecommunications services.

(b)

Details of contract liabilities

Contract liabilities are presented in deferred revenue in the consolidated balance sheets. Changes in contract liabilities are as follows:


	Contract liabilities
	2020 Million			2019 Million
As of January 1		57,431			62,812
Opening balance recognized in the consolidated statements of comprehensive income for the year		(53,802	)		(56,409	)
Other net changes for the year		76,050			51,028

As of December 31		79,679			57,431

(c)

Unsatisfied long-term contracts

The unsatisfied performance obligation of the Group is mainly related to telecommunications services. The Group generally enters into service contracts with customers monthly or for a fixed term, and bills the customers monthly based on the contract terms for the Group’s unconditional right to consideration. For the contracts that have an original expected duration of one year or less and the performance obligations which are regarded as satisfied as billed, the Group has applied the practical expedient permitted under IFRS 15, therefore, the information about the remaining performance obligations were not disclosed.