China Mobile Q2 profit up 7%
Updated: 2011-08-19 09:22
By Edmond Lococo (China Daily)
BEIJING - China Mobile Ltd, the world's biggest phone carrier by users, posted a 7 percent gain in second-quarter profit, aided by rising data traffic from smartphone users downloading games and videos.
Net income beat analysts' estimates, rising to 34.4 billion yuan ($5.4 billion) from 32.2 billion yuan a year earlier, according to figures derived from first-half earnings reported to the Hong Kong Stock Exchange on Thursday. The company was projected to post profit of 33.2 billion yuan according to the average of four analysts' estimates compiled by Bloomberg. Sales rose 9.3 percent to 131.9 billion yuan, from 120.7 billion yuan.
China Mobile Chairman Wang Jianzhou is using popular titles, such as Angry Birds from Rovio Entertainment Oy, to attract customers, helping the carrier maintain its lead over rival China Unicom (Hong Kong) Ltd in subscribers who use third-generation (3G) phone networks to surf the Web.
China Mobile's Mobile Market store boasted 86 million customers, who recorded 260 million downloads in the first half of this year, the company said on Thursday.
"China Mobile has been leading other telecom companies in participating in Internet growth," Eric Wen, an analyst at Mirae Asset Securities in Hong Kong who rates the stock "buy", wrote in an Aug 11 research note. "Mobile literature, mobile gaming and mobile video all recorded strong growth."
Second-quarter sales were seen at 128.8 billion yuan, the average of six analysts' estimates.
China Mobile fell 0.6 percent to HK$75.15 ($9.64) at the noon break in Hong Kong trading before the earnings announcement. The stock has dropped 2.7 percent this year while the benchmark Hang Seng Index has dropped 12 percent.
China Unicom, the nation's only carrier that currently offers Apple Inc's iPhone with a service contract, has so far failed to use that advantage to surpass China Mobile in 3G users.
China Mobile's 3G network is incompatible with the iPhone, and Wang was cited by Shanghai Daily last month as saying that as of May the company had attracted 5.6 million iPhone users, most of whom access the Internet over its Wi-Fi network.
China Mobile had a total of 616.8 million mobile-phone subscribers at the end of June after adding more than 5 million subscribers every month so far this year. The total includes 35 million 3G users, the company said last month.
That exceeds China Unicom's 181.6 million mobile customers and the 24 million users of its 3G service at the end of June. China Telecom Corp was in third place with 108.4 million mobile subscribers in the same period.
China Unicom and China Telecom will report earnings next week.
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