<div id="readability-page-1"><div>Citi issued a report stating that CHINA TELECOM (00728.HK) -0.130 (-2.289%) Short selling $185.88M; Ratio 14.817% , CHINA MOBILE (00941.HK) -0.300 (-0.346%) Short selling $580.91M; Ratio 13.745% and CHINA UNICOM (00762.HK) -0.130 (-1.625%) Short selling $83.06M; Ratio 11.965% have recently launched AI Token plans. The bank believes this industry move marks a significant turning point in the business models of mainland telecom operators. Mainland telecom operators are actively shifting from traditional mobile data billing to a standardized, utility-like AI subscription model.Citi noted that telecom operators can leverage their extensive and deeply entrenched nationwide networks to expand AI applications from large hyperscale cloud service providers to small and medium-sized enterprises as well as retail consumers, directly reaching these segments. The &#34;Telecom Big Three&#34; also possess substantial in-house data centers and computing resources, lowering the marginal cost of AI deployment. The bank stated that the potential margin expansion of the Token model depends on operators proprietary modelsif telecom operators self-developed large language models remain competitive with leading domestic models, they can capture value across the entire AI stack, thereby achieving margins significantly higher than those of a mere distribution channel.The report mentioned that the three major Chinese telecom operators may see a potential valuation re-rating. Amid sluggish growth in traditional services, AI Tokens provide a new revenue driver, repositioning telecom operators from conventional network providers to foundational AI infrastructure suppliers.Citi added that while the launch of tiered plans is a strong signal, the actual commercial impact will depend on end-users willingness to pay for AI services through traditional telecom operators. In addition, another key observation point for Token commercialization is the practical usability of telecom Token plans and the extent to which operators can successfully convert their vast traditional data subscriber base into paying AI users.(da/a)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-19 16:25.)</div></div>

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Citi's report highlights a significant shift among China's major telecom operators—China Telecom, China Mobile, and China Unicom—toward AI Token plans, moving from traditional billing to a utility-like AI subscription model. This transition could lead to a valuation re-rating as telecoms leverage their networks and data centers for AI applications. However, the success of this model hinges on user adoption and the competitiveness of their proprietary AI models.

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Citi: "Telecom Big Three" Shift Toward Foundational AI Infrastructure Suppliers, Ushering in Potential Valuation Re-rating