The mainland's three giant telecommunications operators face increased competition in luring more third-generation (3G) subscribers and in boosting their average revenue per user (arpu) in the second half of this year.
But in the past, it has been a dilemma of their own making because of the huge subsidies they paid to attract 3G subscribers, which has slowed the growth of profitability.
China Mobile, the world's biggest wireless network operator, reported interim revenue of 250 billion yuan (HK$305 billion), up 8.8 per cent year on year, while net profit rose 6.3 per cent to 61.3 billion yuan.
China Unicom (Hong Kong), the country's second-largest mobile phone operator, saw its revenue rise 23 per cent to 101.4 billion yuan from a year earlier. But net profit fell 9 per cent to 2.65 billion yuan due to heavy spending on subsidies.
China Telecom's first-half profit rose 8 per cent to 9.81 billion yuan and revenues rose 11.5 per cent to 120.2 billion yuan.
Unicom is the only operator whose revenue increased but whose profit dropped. The carrier is so far Apple's sole carrier-partner for the iPhone handset in the potentially huge mainland market, where the number of mobile users topped 930 million by July, larger than the total population of Europe.
'The most important reason for the operators seeing a rise in revenue, but not correspondingly in profit, was the subsidies they gave to 3G users,' said Yang Changlong, industry analyst at Beijing's Bayes Consulting.