Telecom revenue outlook gloomy

By Mark Lee and Edmond Lococo (China Daily)
Updated: 2010-11-18 13:09
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HONG KONG - China Mobile Ltd Chief Executive Officer Li Yue said he is not optimistic about the outlook for improving industry revenue as slower sales from voice calls outweigh the demand for data services spurred by smartphones.

"There are some who think the increase in data usage will lead to growth, but I am not so optimistic," Li said at the Mobile Asia Congress conference in Hong Kong. The head of the world's biggest phone carrier by market value said operators need to offer services that integrate well with the daily lives of consumers and businesses.

Li is adding services such as a search engine for mobile phones and wireless payments to sustain growth at China Mobile, where he took over as chief executive this year. The Beijing-based carrier last month reported earnings that missed analysts' estimates after the company boosted marketing spending to win new users.

China Mobile fell 0.6 percent to HK$77.9 ($10) as of the 4 pm close of trading in Hong Kong, while the Hang Seng Index dropped 2 percent. The stock has gained 6.9 percent this year.

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"Traffic volume for data services has doubled, but our revenue growth has still slowed," Li said.

Sales rose 7.8 percent to 352.6 billion yuan ($53.1 billion) in the first nine months, China Mobile reported on Oct 20. The carrier posted a 9.8 percent increase in full-year revenue in 2009. New users added by the company mainly reside in rural areas, where average spending is lower, Chief Financial Officer Xue Taohai said in August.

China Mobile last year started Mobile Market, a site where users can download applications that are similar to Apple Inc's Apps store. In the first half of this year, 25 million applications were downloaded from the site by China Mobile subscribers, Li said.

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