The Chinese telecom industry is predicted to experience stable growth in IT investments over the next five years, according to a new report.

The telecom IT solution market in China will jump from about $2,265,817,070 in 2012 to $3,718,096,360 in 2017, a new projection from IDC (News - Alert) says. That represents a compound annual growth rate of 10.4 percent.

The IDC report, “China Telecom Industry IT Solution 2013-2017 Forecast and Analysis,” says there has been “steady input” from China’s top telecom operators during 2012. These include China Mobile (News - Alert), China Telecom and China Unicom. There also were many 4G licenses issued.

It was also reported that carriers are dropping the belief in “conventional investment philosophies of providing small services, including telephone and mobile communication,” opting instead to put their faith in larger investments.

That means the carriers are moving away from less competitive investments, such as wireless value-added services. IDC backs an approach whereby carriers find value in existing customers, smart pipeline construction, and big data analysis.

Steady growth is predicted, too, for Business Support System and Business Intelligence investments.

"With the advent of the mobile Internet and Big Data era, telecom operators are confronted with a more complicated industry environment. After breaking the closed value-added service ecosystem of carriers, the OTT [over the top] service further impacts the traditional cash flow service of telecom operators, such as SMS [short message service] and voice," Jialin Jiang, an analyst at IDC China Vertical Industry Research and Consulting, said in a statement. “IT investments that can improve carriers' basic competitive abilities and operational efficiency will continue to maintain steady and fast growth."

As examples, Jiang cites such investments as: smart pipelines, Internet traffic management, and cloud-based resource management.

It was also reported that China's telecom industry would start a value-added tax (VAT) reform in 2014. The business tax rating of 3 percent of gross income will be replaced by a VAT of 6 to 11 percent of gross income. The Dongfang Daily reported that China Mobile, China Unicom (News - Alert) and China Telecom may use VAT invoices to deduct taxes, as well.