China Mobile upbeat despite share price dip

PUBLISHED : Friday, 20 May, 2011, 12:00am
UPDATED : Friday, 08 May, 2015, 4:18pm
 

China Mobile, the world's largest wireless network operator, yesterday tried to allay investors' concern about its weak share price performance by focusing on major business initiatives in the pipeline.

At the carrier's annual shareholders meeting in Hong Kong, chairman Wang Jianzhou said the management was 'very confident on the outlook' based on plans to expand its telecommunications infrastructure, identify potential acquisition targets and deliver a new version of Apple's iPhone to its more than 600 million mobile subscribers.

Wang said China Mobile aimed to introduce next year high-speed, fourth-generation (4G) services based on the mainland-backed Time-Division Long-Term Evolution (TD-LTE) standard.

The Beijing-based operator this year started building pilot TD LTE networks and testing their capabilities in several large mainland cities, including Shanghai, Beijing, Guangzhou, Shenzhen, Xiamen and Nanjing.

Chief executive Li Yue said that about 1 million Wi-fi hotspots would be built to support the increasing demand for wireless internet connection by its subscribers nationwide. Li did not provide any timeframe for this development.

Although China Mobile may have missed the opportunity to launch a 3G iPhone based on the mainland-supported TD-SCDMA standard, Wang said there was a chance that Apple would design and release an iPhone that could be used on its 4G TD-LTE network.

Still, Wang said there were about 4 million iPhones in use on its vast and still-growing 2G network.

Lisa Soh, an analyst at Macquarie Securities in Hong Kong, said the Wi-fi deployment and 4G trials were consistent with the expansion efforts that China Mobile previously disclosed.

'But we do not expect the commercial launch of its 4G TD-LTE network next year because it remains in trials,' Soh said. 'An agreement for a TD-LTE iPhone is within the realm of possibility. We believe timing is still a few years away.'

Apple spokeswoman Carolyn Wu declined to comment.

Wang said China Mobile was also eyeing acquisitions in Asia's emerging markets. The carrier's state-owned parent company, China Mobile Communications Corp, has an operation in Pakistan that could be ripe for purchase when it breaks even next year.

Investors yesterday, however, were apparently unimpressed by the expansion plans, after they complained about the steady decline of the operator's share price. One elderly shareholder even told Wang that her investment of HK$3 million in the stock was now worth about HK$1 million.

China Mobile shares were down 0.22 per cent to close at HK$69.05. The stock has fallen 12 per cent in the past six months, according to Bloomberg.

The carrier last month reported a 5.4 per cent increase in net profit to 26.86 billion yuan, from 25.48 billion yuan a year earlier, on the back of solid subscriber growth and greater adoption of so-called value-added services. Total revenue rose 8.3 per cent to 118.17 billion yuan from 109.09 billion yuan a year ago.

1m

Hotspots to be built

The company has 600 million subscribers

Shares were down 0.22 per cent yesterday

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