China Mobile to up revenue through rural push

China Mobile, the world’s largest mobile
operator, registered its fastest half-yearly profit growth in about three
years. In the first half of 2011, China Mobile posted an increase of 6.3
percent in its net profit. It has also made the significant increase in the
number of 3G subscribers for and also sold more value added data services.
Income from value added services like text messages and wireless data services
rose from 19 percent to 80.45 billion Yuan from 67.91 billion Yuan.

Both China Telecom and China Unicom are
trying to compete with China Mobile to lead the market. China Unicom and China
Telecom are trying to lure their 3G smart phone users by providing attractive
offers that include subsidized handsets from Apple, Samsung Electronics and

The overall profit of China Mobile for
the six months increased to 61.28 billion Yuan from 57.64 billion Yuan. This is
an unexpected increase and touched high profits in the market.

Li Ye, CEO of China Mobile, said that it
may take three to four years for the average revenue figure to stabilize as the
company is trying its best in adding subscribers from low-income rural areas as

China Mobile’s operating
revenue maintained steady growth, reaching RMB 485.2 billion, up 7.3 percent
over last year. EBITDA rose 4.5 percent over last year to approximately RMB
239.4 billion. Basic earnings per share grew 3.9 percent over last year to RMB

China Mobile has historically held a
greater share of the rural market than its competitors. By 2006, its network
had expanded to provide reception for 97percent of the Chinese population, and
the company has since seen a sustained stream of new, rural mobile customers.


As of March 2011, China Mobile had about
600 million subscribers. China had 907 million mobile phone users.

China’s other telecom carriers have been
struggling falling (ARPU) as they offer forceful subsidies to widen their user
base in the world’s biggest mobile phone market.

The outlook of China Mobile is better
than the other Chinese operators in the long term because of its plans to roll
out 4G-LTE network and it is hoped that this will boost up its economy.

China Mobile has the largest number of
subscribers and it will improve its bottom line if it spread out a more
advanced and sophisticated technology compared to its other competitors,” said
Shum from BMI Funds Management.

With this high growth, China Mobile is
spreading its wings and widening its scope on further platforms. Presently, it
is in talks with Apple on iPhones and it is expected that it will launch 
 to accelerate uptake of high-end 3G services. iPhone
will be based on its home-grown TDSCDMA network standard.

The company’s goal is to realize the
strategic vision of “Mobile Changes Life”. It will continue promoting
home-grown improvement and will support the parent company in the construction,
operation and evolution of 3G.Above that, it is also planning to divert its
functionality from 3G to 4G in coming times.

By Abhilasha Sharma
[email protected]