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China Mobile Ltd executives, including CEO Li Yue (left), at the company's annual results news conference in Hong Kong on Thursday.[Photo/China Daily]
Data services and more subscriber numbers provide boost to carrier
China Mobile Ltd, the biggest mobile carrier in the world measured by user numbers, said on Thursday that its net profit rose by 5.2 percent to reach 125.9 billion yuan ($19.9 billion) last year, as wireless data traffic and services became a large driver of its revenue growth.
The company's revenue for 2011 was 528 billion yuan, up 8.8 percent from a year earlier, and China Mobile had nearly 650 million users, an increase of 11.6 percent year-on-year, the company said in a filing to the Hong Kong Stock Exchange.
The company's net profit increased at a faster rate last year than in 2010, when it went up by 3.9 percent. Even so, the number went up at a much slower rate than it had in 2008 and in the years before that, when a surge in subscriptions across China led to double-digit profit increases.
The fast-changing telecom industry has brought global wireless operators difficulties, especially as the business for traditional voice services has found itself with little room for growth and as carriers improve their networks to meet the increasingly huge demand for data.
In 2011, China Mobile saw its fastest rate of revenue increase in wireless data traffic. The unit's revenue increased by 45 percent year-on-year and contributed 8.4 percent of the company's operating revenue. China Mobile's revenue from data services increased by 15.4 percent from a year earlier and contributed 26.4 percent of the company's total revenue.
"The data business is playing an increasingly important role for China Mobile, and it will become the biggest driver for China Mobile's rapid growth in the future," Wang Jianzhou, chairman of China Mobile, said earlier this month.
In response to the increasing popularity of mobile Internet devices, China Mobile has taken steps to position itself as more than a network provider. It has also shown ambitions to step into businesses that were previously dominated by handset makers and Internet companies.
Wang said China Mobile is building the biggest Chinese application store in the world - the Mobile Market, which is to be similar to Apple Inc's app store. The company is also looking at providing various services for mobile devices.
China Mobile is faced with greater competition from its domestic rivals in the market for third-generation telecom network services. The company said in its annual report that it had more than 51 million 3G service users in China, or about 40 percent of the market, by the end of 2011, the most among the three Chinese operators.
But last October, China Unicom (Hong Kong) Ltd, the country's second-biggest telecom carrier, managed to outstrip China Mobile to have the biggest monthly net growth in its number of 3G users.
China Unicom had 40.02 million 3G users in 2011. Huang Meng, an analyst with Beijing-research firm Analysys International, expected the size of China Unicom's 3G user population to surpass China Mobile's by the end of this year.
Li Yue, CEO of China Mobile, said at a Hong Kong conference that the company plans to attract 30 million 3G users this year.
China Mobile is the sole Chinese operator that does not offer Apple Inc's iPhone series on contract. But new chipsets from the telecommunications company Qualcomm Inc will let the iPhone, as well as smartphones that run on Google Inc's Android operating system, run on both China Mobile's 3G and 4G networks, wrote Tucker Grinnan, an analyst with HSBC Securities, in a report.
"Qualcomm is producing these chips now," Grinnan wrote. "Integration into the iPhone 5 and other leading handsets will allow China Mobile to leverage its vast and under-utilized 3G network as well as move early to 4G."
In a separate release, China Mobile said that Lu Xiangdong, one of 13 company directors, had resigned "due to his inability to perform his duties as an executive director and a vice-president under his current personal circumstances."
Earlier this month China Mobile had said Lu was "assisting judicial authorities" in an investigation into "suspected financial related issues."