China Mobile Capex heading for significant drop this year?

China Mobile Capex (capital expenditure) for 2014 is heading for significant drop after the telecom giant spending $13.6 billion (83.8 billion yuan) in the first half against planned budget of $36.6 billion (225.2 billion yuan) for the full year.

In the first half of 2014, China Mobile, which competes with China Telecom and China Unicom, invested $5.32 billion (32.8 billion yuan) in 4G alone against a planned telecom Capex allocation of $12.2 billion (74.9 billion yuan) for the full year.

If China Mobile does not invest significantly in telecom networks this year, it will be a big blow for telecom network vendors such as Ericsson, Nokia Networks, Huawei, Alcatel-Lucent, Cisco, Samsung, NEC, ZTE, etc.

China Mobile Capex plan for 2014

China Mobile said its H1 total Capex of $13.6 billion comprises 48.7 percent in mobile networks (2G, 3G and 4G), 36.2 percent in transmission, 6.2 percent in building and infrastructure, 3.2 percent in support systems, 3 percent in business development and 2 percent in others.

Meanwhile, China Mobile said its net income fell 7.8 percent to $5.3 billion (32.5 billion yuan) in the second quarter.

China Mobile 2014 revenue under pressure

Sales in the second quarter rose less than 1 percent to $27.6 billion (169.9 billion yuan) from 168.4 billion yuan a year earlier.

China Mobile had 240.9 million 3G customers and 20.4 million 4G users as on July 31 2014. China Mobile’s total subscriber base reached 793.57 million after adding 2.95 million users in one month.

China Mobile data focus

Mobile data traffic rose 91.4 percent in the first half of 2014. H1 revenue from wireless data traffic increased 51.8 percent, contributing to 24.2 percent of telecom services revenue. Currently, 3G 4G data traffic has reached 44 percent of the total mobile data traffic.

In the first half of 2014, China Mobile sold 120 million TD handsets (including TD-SCDMA and TD-LTE standards) through all distribution channels. The increase in handsets was due to the accelerated migration of customers from 2G network to 3G and 4G networks.

China Mobile networks

China Mobile said it has 410,000 4G base stations covering more than 300 cities. The telecoms will accelerate network construction to achieve continuous coverage in almost all cities and county-level cities as well as effective network coverage in key villages and towns in Mainland China by the end of this year.

China Mobile is also planning trial commercialization of VoLTE.

Baburajan K
[email protected]