CHINA Mobile Ltd., the world’s largest wireless operator by market value, announced last week that its profit in 2006 reached 66 billion yuan (US$8.48 billion), up 23.3 percent, matching the market’s expectation.
China Mobile said benefiting from the stable and rapid economic growth of China, its turnover of 2006 reached 295.4 billion yuan, up by 21.5 percent and the number of subscribers exceeded 300 million, up 22.1 percent, which further consolidated its leading position.
China Mobile added a record 14 million users in the fourth quarter after offering discounts and targeting the 800 million people who live outside cities. The company and its smaller rival, China Unicom Ltd., are seeking to boost customers before the issuing of high-speed wireless phone licenses opens the market to increased competition.
“The driving force behind the growth was the rural market,” said Agnes Deng, who helps manage US$3.5 billion including China Mobile shares at Standard Life Investments Asia in Hong Kong. The question is: “Can China Mobile defend its market share if competition increases?” she said.
“The deepening of the reform in the national telecommunications industry and the issuance of third-generation (3G) licenses in China may result in substantial changes in the industry and the competitive environment,” Wang Jianzhou, China Mobile’s chief executive officer, said in a statement.
The company has said it plans to start trials on a US$3.1 billion 3G network in October.
Earnings before interest, taxes, depreciation and debt payments rose 19.7 percent to 159.6 billion yuan from 133.3 billion yuan a year earlier.
“The group strengthened its efforts in the development of the rural market and further improved its network coverage in rural areas,” Wang said in the statement. “The rural mobile telecommunications market in China presents a momentum of robust growth.”
About half of last year’s subscriber growth came from rural areas, the company said.
China Mobile added a record 4.9 million users in February for a total of 311 million, it said. Monthly user growth this year will exceed that of 2006, Li Yiu, the company’s executive director, said at the briefing.
China, the world’s biggest mobile-phone market by users, had a total of 461.1 million subscribers at the end of December. The country gained 6.3 million customers in January, taking the total to 467.4 million, according to government statistics.
India, the world’s fastest-growing mobile-phone market, had 162.5 million users at the end of February.
China Mobile’s monthly average revenue per customer, or ARPU, an industry measure of the size of a phone bill, was 90 yuan, unchanged a year earlier, and down from 92 yuan in 2004. That’s less than the 6,670 yen (US$57.60) at NTT DoCoMo Inc. in the quarter ended Dec. 31.
China Mobile’s ARPU reflects its higher proportion of prepaid clients, who typically spend less. More than three-quarters, or 236 million, of its subscribers were prepaid users as of Dec. 31.
The mobile operator said capital spending last year rose to 87 billion yuan from 71.5 billion yuan in 2005. The company said it plans to spend 99.8 billion yuan this year, 98 billion yuan the following and 96 billion yuan in 2009.
The government hasn’t said when it will award 3G licenses, or how many it will issue. China has said it plans to offer the high-speed services for the 2008 Beijing Olympics. China Telecom Corp., the nation’s largest fixed-line operator, and rival China Netcom Group Corp.(Hong Kong) Ltd. have applied for mobile licenses.
(SD-Agencies)
