Network costs hit China Mobile

China Mobile reported a mere 0.3% increase in first-quarter profit, as heavy spending on rollouts and handset subsidies negated revenue growth.
 
The operator's unaudited results show a profit of 27.9 billion yuan (€3.4 billion), from 5.7% higher revenue of 134.7 billion yuan.
 
China Mobile plans to spend as much as 190.2 billion yuan in capex this year, with more than half of this to be spent on its pre-commercial TD-LTE rollout.
 
The operator has meanwhile allocated 27 billion yuan to spend on handset subsidies over the year, in a bid to woo more 3G subscribers and help catch up to its rivals by 3G penetration.
 
This spending took its toll on China Mobile's profit for the quarter, but may be showing signs of paying off. The company signed up 26.4 million new 3G customers in Q1, up from 12.3 million in Q4.
 
The company's 3G subscriber base increased to 114.4 million, which compares to China Mobile's total customer base of 726.3 million.
 
ARPU for the quarter was 63 yuan, while average MoU was 488.

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