Data drives China Mobile profits

China Mobile's net profit rose 3.9% last year on the back of rapid growth of its mobile internet and data services.
 
The world’s largest mobile operator by subscribers and market cap on Wednesday announced a net profit of 119.6 billion yuan (€12.9 billion) for calendar 2010, up from 115 billion yuan a year earlier, on operating revenue of 485.2 billion yuan – up 7.3% on 2009.
 
Revenue from mobile internet access jumped 49.4% to 30.53 billion yuan, and was the main driver of value added revenue growth, the firm revealed.
 
The carrier added 61.73 million new subscribers, bringing its total customer base to 584 million – of which 20.7 million were 3G subscribers. However, with the bulk of additions coming from rural or migrant users the firm’s ARPU fell from 77 yuan to 73 yuan.
 
“Overall, APRU would continue to decline, but we expect a slowdown in the decline because of the increasing penetration of smartphones,” China Mobile chief Li Yue said.
 
Li said China Mobile now has about 43% share in the China 3G market and aims to add 25 million new 3G subscribers this year, more than doubling its 3G user base to 45 million by year-end.
 
To help achieve the goal, the carrier plans to increase its spending on handset subsidies to 17.5 billion yuan in 2011, up from 15.2 billion yuan last year. The majority of subsidies – 80% - will go towards 3G handsets.
 
The firm also plans to increase capex to 132.4 billion yuan from 124.3 billion yuan last year. The funds will go towards expanding its 3G network capacity and WLAN build-out, as it pursues data traffic business.

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