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China Mobile says first half profit up 4.2 percent on demand growth but competition growing

China Mobile says first half profit up 4.2 percent on demand growth but competition growing

China Mobile Ltd., the world’s biggest phone carrier by subscribers, said Thursday its first-half profit rose 4.2 percent on growing demand and the rollout of mobile Internet services but warned it faces increased competition. Profit was 57.6 billion yuan ($8.4 billion) for the six months ending June 30, the Beijing-based company said. Revenue was up 7.9 percent from a year earlier at 229.8 billion yuan ($33.6 billion).

China Mobile’s profit and customer growth has slowed from the double-digit levels of recent years in a saturated market. Beijing restructured its telecoms industry into three groups in 2008, each with mobile and fixed-line assets, to revive competition and speed industry development.

“The group’s development faces new challenges amid the already high mobile penetration rate and the intensifying competition in China’s telecommunications market,” said chairman Wang Jianzhou in a statement.

China Mobile said it added 31.8 million accounts in the first half to bring its total to 554 million.

The company has promoted nontraditional services such as mobile Internet to drive revenues and said Thursday that strategy was paying off.

Revenue from music downloads, online payments services and other related business rose 13.4 percent in the first half over a year ago and contributed 29.5 percent of China Mobile’s revenue.

The company said its mobile Internet shopping service, Mobile Market, launched in August 2009, has signed up 5 million customers and the number was growing at a 60 percent annual rate.

`Mobile Internet access data usage is growing rapidly and becoming an important driver of future growth for our value-added business,” Wang said.

The company said it was likely to benefit from the communist government’s effort to develop China’s rural areas and poor West and to promote domestic consumption to ease reliance on exports and investment.

Source: AP News

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