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China Mobile recorded almost 946 million total wireless subscribers in the first half of this year, including 251 million 5G customers. Photo: Agence France-Presse

China Mobile posts 6 per cent profit gain on strong jump in 5G users in first half

  • The world’s largest wireless network operator posted a net profit of US$9.1 billion in the six months through June
  • The state-owned telecoms carrier also recorded 251 million 5G mobile subscribers at the end of June
China Mobile
China Mobile, the world’s largest wireless network operator by subscribers, reported a 6 per cent rise in profit for the first half of this year, boosted by new 5G subscribers and cost-paring efforts.

Net profit rose to 59.1 billion yuan (US$9.1 billion) for the six months through June, compared with 55.8 billion yuan in the same period last year, according to the company’s statement on Thursday. Operating revenue advanced to 443.6 billion yuan, up 13.8 per cent from a year earlier. The company raised its interim dividend to HK$1.63 a share, compared with HK$1.53 a year before.

The earnings bolster the prospects for China Mobile – one of the three state-owned mobile network operators that were expelled by the New York Stock Exchange earlier this year – as it seeks a listing in mainland China.
While all three Chinese telecommunications carriers are focusing on commercial and industrial applications to accelerate 5G revenue growth and recoup their investment, it is especially crucial for China Mobile which has lagged rivals in adding users.


Chinese engineers from Huawei, China Mobile build world’s highest 5G base station on Mount Everest

Chinese engineers from Huawei, China Mobile build world’s highest 5G base station on Mount Everest
China Mobile added 3.6 million users in the first half – a marked improvement from 2020, when it had lost over 8 million subscribers in the full year. But the gains pale in comparison to 11.5 million new customers lured by China Telecom Corp and a net addition of 4.6 million subscribers by China Unicom in the same period.

Shareholders of China Mobile are awaiting details on the company’s listing plans in mainland China which received board approval in May.

The listing could happen within this year if things go with the plan, company chairman Yang Jie said during a post-earnings call, adding that related works will be on full speed in the second half.

Robust user growth will be a tailwind here, according to Bloomberg Intelligence’s analyst Anthea Lai. “Their quickening 5G customer gains bode well with their A-share listing plans,” she wrote in a July 21 report.
Investors will also be keenly looking at the dividend, as the telecoms companies’ profit gets a fillip from a faster 5G subscriber net addition in June and cost-cutting measures.
“The telco’s strong cost control should help limit margin pressure from 5G network and marketing expenses,” Lai wrote in an August 10 report.

Huawei’s higher 5G tower prices win over China Mobile

Industrial Internet is likely to be the biggest growth driver for the operators over the next five years, Jefferies analysts led by Edison Lee said in a report on July 29.

Related businesses include data centres, cloud services, 5G-driven information and communications technologies, big data and the Internet of Things.

China’s spending on information technology may rise by 15 per cent annually over the next five years, Jefferies’ Lee said, citing research and advisory firm Gartner.

China Mobile’s shares closed 0.3 per cent lower on Thursday in Hong Kong after its earnings announcement. The stock has surged 14 per cent this year. The benchmark Hang Seng Index has slipped 2.6 per cent in 2021.

Total mobile subscribers touched almost 946 million, including 251 million 5G customers. Average mobile monthly revenue per user rose 3.8 per cent to 52.2 yuan in the first half, compared to 50.3 yuan a year ago. Operating expenses reached 381 billion yuan, compared with 330.7 billion yuan last year.