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

Mobile messaging apps are also taking revenue away from the company

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.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issueschina mobilefinancial results

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Father’s Day Gift Guide

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?