China Mobile posts weak third quarter earnings
World’s largest wireless network operator seeks greater balance in its 4G mobile and fixed-line broadband initiatives
PUBLISHED : Thursday, 20 October, 2016, 9:12pm
UPDATED : Thursday, 20 October, 2016, 10:58pm
Related topics
China Mobile is aiming to achieve a more balanced development in its 4G mobile and fixed-line broadband businesses following a sluggish financial performance in the quarter to September 30.
The world’s largest wireless network operator on Thursday reported a 2 per cent decrease in third-quarter net profit to 27.5 billion yuan (HK$31.6 billion), down from 28.2 billion yuan in the same period last year, on lower smartphone sales and tariff adjustments.
In a filing with the Hong Kong stock exchange after the market closed, China Mobile chairman Shang Bing said the company stepped up the promotion of flat-rate packages, which turned out to have “a negative impact on revenue growth”.
Earnings before interest, taxes, depreciation and amortisation (ebitda) – a measure of a firm’s operating profitability – inched up to 66.1 billion yuan in the third quarter from 65.5 billion yuan a year earlier.
Revenue was flat at 172.3 billion yuan, compared with 172 billion yuan a year ago.
“It was a slightly weak result,” Bernstein Research senior analyst Chris Lane said. “Ebitda was a 1.9 per cent miss versus consensus [market] estimates and net profit was a bit more, at 5.4 per cent below estimates.”
Combining China Mobile’s results over the past three quarters, however, showed some gains. The operator reported a 3.1 per cent year-on-year increase in net profit to 88.1 billion yuan in the nine months to September, while ebitda was up 1.3 per cent to 200.4 billion yuan.
The group is at a critical stage of transformation in its development
Revenue for the same period grew 4.3 per cent year on year to 542.7 billion yuan.
At the end of September, China Mobile had 844 million total mobile subscribers, including 481 million 4G users. Its fixed-line broadband users reached 74.2 million.
“The group is at a critical stage of transformation in its development,” Shang said. “There is a relatively high demand for resources from various fronts, including the growth of 4G business, the development of wireline broadband as well as the deployment of digital services.”
In March, Shang said China Mobile’s 31.9 billion yuan acquisition of China TieTong Telecommunications Corp would help drive the expansion of its fixed-line broadband services.
He said that strategy would tap into the opportunities presented by the central government’s bold “Internet Plus” policy, in which internet technologies become deeply integrated into traditional industries to make them more efficient.
This article appeared in the South China Morning Post print edition as: China Mobile earnings fall short
Most Popular
Viewed
- 1
![In the second report in a series, He Huifeng and Celia Chen look at how Beijing's ambitious industrial plan aims to break China’s reliance on foreign technology and pull its hi-tech industries up to Western levels]( "In the second report in a series, He Huifeng and Celia Chen look at how Beijing's ambitious industrial plan aims to break China’s reliance on foreign technology and pull its hi-tech industries up to Western levels")
- 2
![Ma’s planned stepping down in his 50s is a rare case in the Chinese business world, where tycoons often remain in control well into old age.]( "Ma’s planned stepping down in his 50s is a rare case in the Chinese business world, where tycoons often remain in control well into old age.")
- 3
![Chinese smartphone brands have chipped away at Apple’s market share in China by introducing feature-laden models, but are striving to convince consumers to shell out top dollar and enshrine their brands with the same premium cachet reserved for the iPhone]( "Chinese smartphone brands have chipped away at Apple’s market share in China by introducing feature-laden models, but are striving to convince consumers to shell out top dollar and enshrine their brands with the same premium cachet reserved for the iPhone")
- 4
![A screenshot from independently produced documentary Bitcoin Girl, available on streaming video service iQiyi, shows the titular cryptocurrency user, who is known by her online name He Youbing. Photo: iQiyi]( "A screenshot from independently produced documentary Bitcoin Girl, available on streaming video service iQiyi, shows the titular cryptocurrency user, who is known by her online name He Youbing. Photo: iQiyi")
- 5
![Jack Ma, executive chairman of Alibaba Group, waves to the audience during the closing ceremony for the 18th Asian Games in Jakarta, Indonesia. Photo: AP]( "Jack Ma, executive chairman of Alibaba Group, waves to the audience during the closing ceremony for the 18th Asian Games in Jakarta, Indonesia. Photo: AP")
Shared
- 1
![Ma’s planned stepping down in his 50s is a rare case in the Chinese business world, where tycoons often remain in control well into old age.]( "Ma’s planned stepping down in his 50s is a rare case in the Chinese business world, where tycoons often remain in control well into old age.")
- 2
![In the second report in a series, He Huifeng and Celia Chen look at how Beijing's ambitious industrial plan aims to break China’s reliance on foreign technology and pull its hi-tech industries up to Western levels]( "In the second report in a series, He Huifeng and Celia Chen look at how Beijing's ambitious industrial plan aims to break China’s reliance on foreign technology and pull its hi-tech industries up to Western levels")
- 3
![Jack Ma, executive chairman of Alibaba Group, waves to the audience during the closing ceremony for the 18th Asian Games in Jakarta, Indonesia. Photo: AP]( "Jack Ma, executive chairman of Alibaba Group, waves to the audience during the closing ceremony for the 18th Asian Games in Jakarta, Indonesia. Photo: AP")
- 4
![Chinese smartphone brands have chipped away at Apple’s market share in China by introducing feature-laden models, but are striving to convince consumers to shell out top dollar and enshrine their brands with the same premium cachet reserved for the iPhone]( "Chinese smartphone brands have chipped away at Apple’s market share in China by introducing feature-laden models, but are striving to convince consumers to shell out top dollar and enshrine their brands with the same premium cachet reserved for the iPhone")
- 5
![Ma, the co-founder of Asia’s most valuable company and one of China’s most recognisable names, will remain Alibaba’s executive chairman for 12 months until September 10, 2019]( "Ma, the co-founder of Asia’s most valuable company and one of China’s most recognisable names, will remain Alibaba’s executive chairman for 12 months until September 10, 2019")
Commented
- 1
![Beijing retaliates with duties on US$60 billion of US goods due to come into effect on Monday]( "Beijing retaliates with duties on US$60 billion of US goods due to come into effect on Monday")
- 2
![Not responsible to declare public holiday without assessing impact on all sectors, chief executive says]( "Not responsible to declare public holiday without assessing impact on all sectors, chief executive says")
- 3
![Plans to send vice-premier Liu He to Washington for negotiations are being reviewed after the US President escalated the dispute]( "Plans to send vice-premier Liu He to Washington for negotiations are being reviewed after the US President escalated the dispute")
- 4
![European companies operating in the mainland are seriously worried about the impact of the US-China trade war on their operations. Photo: Reuters]( "European companies operating in the mainland are seriously worried about the impact of the US-China trade war on their operations. Photo: Reuters")
- 5
![The US president’s move to impose 10 per cent tariffs on US$200 billion of Chinese goods was seen as killing any chance of new talks taking place]( "The US president’s move to impose 10 per cent tariffs on US$200 billion of Chinese goods was seen as killing any chance of new talks taking place")
You may also like
A matter of life and death: puppet masters to reveal dark side
In partnership with: Leisure and Cultural Services Department
Getting old with splendid physical and mental health
Brought to you by: The Hong Kong Jockey Club Charities Trust
Comments: