China Mobile Profit Beats Estimates on 4G Subscriber GainsBloomberg News
World’s largest phone carrier added 116 million 4G accounts
4G still has room to grow as millions haven’t upgraded yet
China Mobile Ltd.’s first-half profit rose 5.6 percent, beating analyst estimates, after the world’s largest phone carrier by users added more 4G subscribers than the populations of the U.K. and Spain combined.
Net income increased to 60.6 billion yuan ($9.1 billion), compared with 57.3 billion yuan a year earlier, the company said in a statement on Thursday. The results exceeded the 58.8 billion yuan median of five analysts’ estimates in a Bloomberg News survey.
The carrier, which accounts for about 65 percent of the nation’s wireless users, added 116.3 million 4G subscribers during the first six months as more people made the switch from slower services. That market has room to grow as more than half of China’s mobile-phone users use slower 3G or 2G services.
"The results are very impressive," said Chris Lane, an analyst at Sanford C. Bernstein. "We noticed that the tone of the disclosure was more upbeat than ever before. "
China Mobile shares rose 0.7 percent to HK$96.70 as of the close in Hong Kong.
The carrier intends to stop selling roaming plans from end of this year, Chief Executive Officer Li Yue told reporters in Hong Kong Thursday.
Li also said the company has no intention to sell its stake in Shanghai Pudong Development Bank. China Mobile acquired a 20 percent holding in the lender in 2010.
Separately among other phone operators in the region, Australia’s Telstra Corp. on Thursday reported a 36 percent increase in its fiscal-year profit, more than analysts estimated. Singapore Telecommunications Ltd. posted quarterly earnings that were little changed from a year earlier.
Other key points from China Mobile’s statement:
- Operating revenue increased 7.1 percent to 370.4 billion yuan.
- Earnings before interest, taxes, depreciation and amortization gained 2.9 percent to 134.4 billion yuan
- Company added 10.8 million broadband users during the first six months.
- Company says it will continue to hold talks with regulators on the expected cancellation of long-distance and roaming tariffs
- Though company says it had a "good" first half, competition in 4G, new competition from Internet companies and regulatory uncertainties are risks that China Mobile faces going forward
— With assistance by Jing Yang De Morel