May 19 (Bloomberg) -- China Mobile Ltd. Chairman Wang Jianzhou said he’s “very confident” about the carrier’s prospects as an investor questioned the merits of holding the stock after it fell 12 percent in the past six months.
China Mobile adds about 5 million subscribers a month and has more room to grow as it shifts to a more advanced network next year, Wang said at an annual shareholders meeting in Hong Kong today. The company, the world’s largest wireless carrier by customers, is also considering acquisitions in Asia, he said.
The stock’s decline is worse than the 1.9 percent drop for Hong Kong’s Hang Seng Index in the same period. China Mobile said in March it will invest as much as 132.4 billion yuan ($20 billion) on its current third-generation network and add wireless hotspots to attract higher-spending customers to download music and games, after expanding its user base by luring customers in China’s rural areas who spend less.
“The share price is comparatively low, and our management team is concerned about that and how to realize full value,” Wang said in response to a shareholder’s question about the stock’s decline. “Management is still very confident in the outlook.”
The Hong Kong-based operator will look at opportunities to buy companies in Asia, he said. Its parent has a unit in Pakistan that may break even next year, and China Mobile may buy over the unit “at any time,” Wang said.
China Mobile lost 0.3 percent to close at HK$69.00 in Hong Kong trading, and the Hang Seng Index added 0.7 percent.
Surpassing 600 Million
The carrier became the world’s first phone company to exceed 600 million subscribers in the first quarter, driven by additions of customers in the countryside. China Unicom (Hong Kong) Ltd., the nation’s second-biggest mobile-phone company with 320.9 million subscribers, has 18.5 million 3G users, trailing the larger rival’s 27 million.
China Mobile aims to maintain its lead with heavy-data users by introducing the country’s first fourth-generation network using the Chinese-developed TD-LTE technology next year, Wang said. It received government approval in December to begin a trial in seven major cities including Beijing, Shanghai and Shenzhen, he said.
The company may also be able to offer Apple Inc.’s iPhone with the shift to TD-LTE, Wang said. While Apple has decided not to make a version of the phone for the third-generation TD-SCDMA system that is used only by China Mobile, the Cupertino, California-based company may produce one for the TD-LTE system, he said.
Carolyn Wu, an Apple spokeswoman in Beijing, declined to comment.
Even without an iPhone that works on its 3G network, China Mobile has been able to attract 4 million users of the popular handset with its wireless hotspots, Wang said. The company intends to have as many as 1 million hotspots, Chief Executive Officer Li Yue said, without giving a timeframe.
IPhone users make greater use of data and downloads than the average subscriber, Wang said, without providing figures.
China Mobile said last month that 549 million customers used value-added data services on their phones in the first quarter, and 476 million accessed its wireless music service. Value-added services were the “driving force” of sales growth in the first quarter, the company said.
First-quarter net income climbed 5.4 percent from a year earlier to 26.9 billion yuan, and sales rose 8.3 percent to 118.2 billion yuan, the company said April 20.
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