China Mobile profits up on higher Internet use

Profits in the first half rose as more customers used their handsets to connect to the Internet

China Mobile, the world's largest mobile carrier, reported net profits rising by 6.3 percent for the first half of 2011, as the company had more customers surfing the Internet with its handsets.

The Chinese company said on Thursday that profits for the period reached 61.3 billion yuan (US$9.6 billion). Its revenue was 250 billion yuan, a year-on-year increase of 8.8 percent.

The carrier now has 616 million customers, 31.7 million of which were added during the half-year. The user growth represents an increase of 3.2 percent from the same period last year. China Mobile's 3G (third-generation) user base, however, continues to remain small at 35 million users.

The carrier faces stiff competition from rivals China Unicom and China Telecom, which together have close to 290 million mobile phone users. The companies are all vying to sell more smartphones to get more customers to sign up to use their 3G networks.

Although China Mobile makes most of its money through voice calls, the company's value-added business has risen to 32.2 percent of total revenues.

Driving growth in its value-added business is an increase in the number of users connecting to the Internet and downloading data with their phones. The carrier has its own app store which saw 260 million downloads in the first half of 2011. It helped grow China Mobile's revenue from its wireless data business by 42.8 percent year-on-year.

China Mobile is also involved in deploying faster 4G networks in China. The country is currently testing 4G networks using the LTE TDD (Long-Term Evolution Time-Division Duplex) standard in six cities.

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Michael Kan

IDG News Service
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