China Mobile net profit drops 8.5% on competition, regulation

Aug 14, 2014

China Mobile, the world's biggest mobile operator by subscribers, said Thursday its half-year net profit fell by 8.5 percent, blaming the downturn on fierce competition and market reforms.

The company said in a filing to the Hong Kong bourse, where it is listed, that its net profit for the first six months of 2014 fell to 57.7 billion yuan ($9.37 billion), down from the same period last year.

It follows an announcement in March when the company said its 2013 full-year net profit went down by six percent, its first decline for more than a decade.

Its shares closed at HK$88.3 in Hong Kong trading Thursday, up 1.09 percent, while the city's benchmark Hang Seng Index closed down 0.36 percent.

"The company will face relatively high pressure in its short-term growth," it said in the filing, adding market competition and reforms that included changing taxation methods brought down profitability.

Revenue was up 7.1 percent at 324.7 billion yuan, while its subscriber base rose to more than 790 million, up 6.8 percent, including 14 million 4G users.

The Beijing-based company was granted the license to operate the faster next-generation 4G data network in China in December last year.

"Communications operators have entered into a new phase of 4G competition, and market competition will become fiercer," the company said.

The 4G network is being "rapidly built up", the company said, now with 410,000 base stations put in place, covering 300 cities.

One of China Mobile's main competitors, China Unicom, said earlier this month its first half net profit rise 26 percent to 6.69 billion yuan.

Its mobile subscribers grew by 14.02 million to 295 million, and total mobile data usage was up more than 80 percent year-on-year.

Explore further: China Unicom 1H profit jumps on 3G, 4G revenue

add to favorites email to friend print save as pdf

Related Stories

China Mobile net profit rises 1.4%

Oct 22, 2012

China Mobile, the world's biggest mobile operator by subscribers, Monday reported a 1.4 percent rise in net profit for the first nine months of the year, amid robust growth in its subscriber base.

China Unicom 1H profit leaps 55 percent

Aug 08, 2013

China Unicom Ltd., one of the country's three big state-owned phone companies, said first half profit jumped by more than half as it signed up more third-generation users and customers increased their usage of mobile data ...

Recommended for you

Out-of-patience investors sell off Amazon

13 hours ago

Amazon has long acted like an ideal customer on its own website: a freewheeling big spender with no worries about balancing a checkbook. Investors confident in founder and CEO Jeff Bezos' invest-and-expand ...

States ascend into the cloud

19 hours ago

Seven years ago, the state of Delaware started moving computer servers out of closets and from under workers' desks to create a consolidated data center and a virtual computing climate.

Microsoft drops Nokia name from smartphones

21 hours ago

Microsoft said Friday it was dropping the Nokia name from its Lumia smartphones, rebranding following the acquisition earlier this year of the Finnish group's handset division.

Amazon's loss makes holidays a question mark

22 hours ago

Amazon's trademark smile icon is becoming more of a grimace. The world's largest online retailer reported a wider third-quarter loss than analysts expected and gave a disappointing holiday forecast.

User comments : 0