User spending boosts China Mobile
Nine-month earnings at world's largest carrier in subscriber terms up 25pc
China Mobile (Hong Kong), the world's largest wireless carrier in subscriber terms, said nine-month profit rose 25 per cent, driven by better average spending by users and higher data contribution amid a less competitive operating environment.
Profit rose to 46.13 billion yuan from 36.87 billion yuan a year earlier, according to China Mobile's website.
Operating revenue soared 21 per cent to 212.7 billion yuan, on the back of a 39 million net increase in new subscribers, leading the mobile carrier to reach 287.2 million users at the end of September.
China Mobile's operating performance was in line with market expectations.
The result 'was no surprise to the market', said a telecommunications analyst at a local brokerage. 'Earnings will continue to pick up steadily in the coming two years mainly because of the company's market power, with up to 80 per cent market share before the introduction of 3G services.'
Third-generation services, which allow faster downloads of video and other data, are likely to start in late 2008, he said.
'We think that when 3G licences are issued, China Mobile will benefit from the lifting of regulatory overhang,' Merrill Lynch analyst Wendy Liu said in a research note, raising the 12-month target price for the company to HK$65 from HK$62.
China Mobile shares, which have gained 35 per cent since June 30, closed up 0.8 per cent at HK$59.10 yesterday.
The government is expected to issue at least three 3G licences next year, one of which will be for the unproven, domestically developed TD-SCDMA standard.
China Mobile is expected to receive a WCDMA licence as it is the most mature, scalable 3G standard, and will allow the firm to launch the service quicker than its peers.
The addition in new customers, voice-usage volume and value-added businesses contributed to the sustainable growth in operating revenue and earnings in the first three quarters, the company said.
Average revenue per user rose one yuan to 89 yuan, as China Mobile and smaller rival China Unicom limited efforts to attract customers using price cuts.
