China's Major Telecoms Ban Third-Party Sales of Ultra-Low-Cost Data SIMs

China's three primary telecommunications operators are ending the era of ultra-low-cost data-only SIM cards sold through unofficial channels. The move, driven by a rectification policy from the Ministry of Industry and Information Technology (MIIT), aims to stabilize a market destabilized by aggressive price wars and unsustainable user acquisition strategies.

Under the MIIT mandate, the three major operators were required to clear all third-party online sales channels—including e-commerce stores, mini-programs, and live-streaming rooms—of these discounted products by July 31. New applications for these cards are now restricted to official channels only. Despite the crackdown on new sales, operators have confirmed that existing activated data SIM cards will remain functional and that packages already in use will not be modified.

The Rise of Cross-Province Poaching

For years, these low-cost SIMs served as a loophole for operators to meet user acquisition KPIs without alienating their primary customer base with discriminatory pricing. This created a chaotic environment where provincial subsidiaries competed against one another, leading to a trend of "cross-province reselling." In this system, users in first-tier cities sought out cards from regions such as Xinjiang, Tibet, and Shijiazhuang to access significantly cheaper data rates.

This systemic imbalance shifted the financial burden of network maintenance onto urban operators, who handled the actual traffic, while the revenue flowed to rural subsidiaries and third-party agents. The result was a fragmented market where the cost of providing the service far outweighed the revenue generated from the discounted plans.

The Monetization Struggle

The crackdown comes as the industry struggles to monetize its massive 5G infrastructure. In 2025, total mobile internet traffic increased by 17.3% to 3,958 billion GB. However, despite this surge in consumption, mobile data revenue decreased by 3.1% to 609.7 billion yuan. This divergence highlights a critical failure in the current pricing model, where increased usage is not translating into increased profit.

A Shift Toward Revenue Preservation

This policy shift signals a transition for the Chinese telecom market, moving away from a "growth-at-all-costs" KPI model toward a strategy of revenue preservation. For consumers, it marks the end of "extreme cost-saving" via secondary data cards used to bypass expensive primary plans.

Industry observers will now be watching to see if this consolidation of sales channels successfully halts the revenue slide or if users migrate toward other alternatives. The move underscores the broader struggle of telecommunications providers to find a sustainable balance between expanding 5G access and maintaining a viable bottom line in a high-consumption environment.