& cplSiteName &

China Mobile Grows Profits on 4G Gains

Iain Morris
10/20/2016
50%
50%

China Mobile has reported another quarter of explosive growth in 4G subscriber numbers, with those gains fueling a rise in sales and profitability over the first nine months of the year.

The operator, which is the largest of China's three state-backed service providers, said it made 542.7 billion ($80.5 billion) in revenues between January and September -- 4.3% more than in the year-earlier period -- while profits (attributable to equity shareholders) rose by 3.1%, to RMB88.1 billion ($13.1 billion).

China Mobile Ltd. (NYSE: CHL) has added another 7 million mobile customers since reporting figures for the first six months, giving it 844 million in total, and it continues to extend its 4G lead over smaller rivals China Unicom Ltd. (NYSE: CHU) and China Telecom Corp. Ltd. (NYSE: CHA). (See China Mobile's 4G Boom Fuels Profit Growth.)

Figures show that 481 million customers are now using 4G services, 52 million more than in June.

The company has continued to dominate the 4G market despite the best efforts of its two competitors, which now lag China Mobile by some distance.

Yet to report results up to September, China Unicom issued a profit warning earlier this week in which it revealed that about 88.9 million customers are now in its 4G network. At the end of June, China Unicom had 72 million 4G customers and 261 million mobile customers in total.

China Telecom, which is also due to publish earnings later this month, had 210.5 million mobile customers at the end of August -- according to monthly updates -- including 101.4 million 4G customers. Since the start of the year, it has been adding 4G customers at a rate of about 5.4 million per month, making it look relatively pedestrian alongside China Mobile.


Want to know more about 4G LTE? Check out our dedicated 4G LTE content channel
here on Light Reading.


Nevertheless, while China Mobile has extended its 4G lead, its average revenue per user (ARPU) has been dropping as services are adopted by less affluent customers.

Monthly ARPU over the January-to-September period fell to RMB60 ($8.9) from RMB61.5 ($9.1) a year earlier.

The operator also said it was stepping up its efficiency measures to cope with growing demands on its business.

"There is a relatively high demand for resources from various fronts including the growth of 4G business, the development of wireline broadband as well as the deployment of digital services," it said in a statement. "The group proactively enhanced cost efficiency across its operations, deepened transformation of its sales and marketing model, and promoted more efficient use of resources."

Although it has trailed China Telecom in the fixed-line sector, China Mobile is also becoming increasingly active in this market, adding 8.4 million fixed broadband customers since the end of June to give it 74.24 million in total.

ARPU in that market has fallen slightly to RMB33 ($4.9) per month from RMB33.4 ($5) in the first nine months of 2015.

The company's share price closed down about 1% in Hong Kong earlier today, which could reflect the lingering investor concern about a slowdown in the Chinese market and what this means for China Mobile's prospects in coming months.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Featured Video
From The Founder
John Chambers is still as passionate about business and innovation as he ever was at Cisco, finds Steve Saunders.
Flash Poll
Upcoming Live Events
June 26, 2018, Nice, France
September 12, 2018, Los Angeles, CA
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 17, 2018, Chicago, Illinois
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
NFV Is Down but Not Out
Iain Morris, News Editor, 5/22/2018
What VeloCloud Cost VMware
Phil Harvey, US News Editor, 5/21/2018
Trump Denies ZTE Deal, Faces Senate Backlash
Dan Jones, Mobile Editor, 5/22/2018
5G in the USA: A Post-BCE Update
Dan Jones, Mobile Editor, 5/23/2018
Here Comes DOCSIS 4.0
Alan Breznick, Cable/Video Practice Leader, Light Reading, 5/22/2018
Animals with Phones
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed