China Mobile adds 5.26m users

China Mobile continued its strong momentum last month by adding a record of 5.26 million new users during the month at the expense of fixed-line rival China Telecom, which added only 900,000 users.

The mainland's dominant mobile service provider said of its new subscribers that 353,000 were contract users and 4.92 million prepaid.

Its total number of users rose to more than 321 million last month.

'The [shift to] mobile has been speeding up in 2007, as reflected by both weak net additions and declining traffic in the first four months for the fixed-line market,' said UBS telecommunications analyst Wang Jinjin. 'China Mobile's [rural market] strategy, along with its implementation of a caller-party-pays system and reduction of roaming charges, could only accelerate the trend.'

China Mobile chairman Wang Jianzhou early this week in Hong Kong said that the rural market was still its growth engine, contributing more than half of new business.

To boost demand, the company has gradually launched a caller-pays package.

'We are comfortable with the introduction of this new package as it drives up the minutes as the average revenue per user drops,' Mr Wang said.

Analysts forecast that the reduction in domestic and international roaming service fees will drive growth for the remainder of the year.

China Telecom reported slow net fixed-line user additions last month, with the number just up 300,000 over the previous month. Its broadband service added 600,000 new users, down from 700,000 in March.

A China Telecom spokesman said the company aims at add seven million new users this year.

'It is normal for the broadband business to be affected by seasonal fluctuations,' said Wong Chi-man, an analyst at Everbright Securities.

In the first quarter, China Mobile's net profit jumped 22 per cent year on year to 17.5 billion yuan while China Telecom earnings grew 3.9 per cent to 6.14 billion yuan.