Follow Us

We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message

China Mobile's Q4 profit drops 16 percent on 4G network costs

Mobile messaging apps are also taking revenue away from the company

Article comments

China Mobile posted a rare drop in profit growth for the fourth quarter, as the world's largest carrier is struggling to fend off the competition from rival carriers, and smartphone messaging apps.

During the period, the company's net profit reached 30.2 billion yuan (US$4.9 billion), declining 16 percent year-over-year, the company said Thursday.

Revenue continued to rise, up 10 percent year on year at 167.2 billion yuan.

While China Mobile may have 767 million customers, it faces the difficult task of squeezing more revenue out of its users by signing them up for pricier data services. At the end of last year, only about a quarter of China Mobile's had subscribed to its faster 3G network, with the remainder on slower network services.

To boost earnings, China Mobile is betting on its new 4G network to create more revenue streams. In December, it launched the higher-speed data services, and unveiled dozens of new smartphones made for the network. But in the short-term, construction of its 4G services is raising costs and dragging down profits.

For this year, China Mobile's capital expenditure budget is projected to reach 225.2 billion yuan, up 22 percent from a year ago.

A bright spot for China Mobile is that it signed a deal with Apple in December to finally sell an iPhone built for its network. Previously, China Mobile was the last remaining mobile carrier in the nation not selling the handset.

In addition, the company also broke a record, and sold 150 million handsets built for its 3G network last year. This marked a 180 percent jump from the prior year.

But even as more of China Mobile's customers move to smartphones, the company has to contend with the rise of mobile apps. In particular, are smartphone messaging products that can replace traditional phone calls and SMS texting. Last year, China Mobile's revenue from voice calls and SMS declined year-over-year by 3.4 percent and 6.5 percent, respectively.



Share:

More from Techworld

More relevant IT news

Comments



Send to a friend

Email this article to a friend or colleague:

PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.

Techworld White Papers

Choose – and Choose Wisely – the Right MSP for Your SMB

End users need a technology partner that provides transparency, enables productivity, delivers...

Download Whitepaper

10 Effective Habits of Indispensable IT Departments

It’s no secret that responsibilities are growing while budgets continue to shrink. Download this...

Download Whitepaper

Gartner Magic Quadrant for Enterprise Information Archiving

Enterprise information archiving is contributing to organisational needs for e-discovery and...

Download Whitepaper

Advancing the state of virtualised backups

Dell Software’s vRanger is a veteran of the virtualisation specific backup market. It was the...

Download Whitepaper

Techworld UK - Technology - Business

Innovation, productivity, agility and profit

Watch this on demand webinar which explores IT innovation, managed print services and business agility.

Techworld Mobile Site

Access Techworld's content on the move

Get the latest news, product reviews and downloads on your mobile device with Techworld's mobile site.

Find out more...

From Wow to How : Making mobile and cloud work for you

On demand Biztech Briefing - Learn how to effectively deliver mobile work styles and cloud services together.

Watch now...

Site Map

* *