China Mobile first half profit falls 8.5 per cent amid heavy spending to roll out 4G service

China Mobile office building in central Linxia City, China. Photo by Vmenkov / Wikimedia Commons.

BEIJING—China Mobile Ltd., the world’s biggest phone carrier by number of subscribers, said Thursday its first-half profit fell 8.5 per cent as the company rolled out fourth-generation service.

China Mobile, one of China’s three major state-owned phone carriers, earned 57.7 billion yuan ($9.4 billion) in the six months ending June 30. Operating revenue rose 7.1 per cent to 324.7 billion yuan ($54.1 billion).

Profit margins at China Mobile and its two major rivals, China Telecom Ltd. and China Unicom Ltd., have been squeezed since Beijing rearranged the industry in 2008 to encourage competition and innovation. Each carrier was assigned mobile and fixed-line assets.

China Mobile received the country’s first license for 4G service in December and has spent heavily to build what it says is the world’s biggest 4G network, with 410,000 base stations in 300 cities.

“The initial 4G development has been remarkable with 4G network capabilities being rapidly built up,” the company said in a statement.

Revenue from wireless data rose by more than half from a year earlier, contributing 24.2 per cent of telecommunications services revenue.

“Revenue derived from data traffic became a major driver of revenue growth,” the company said.

Its total subscribers rose 6.8 per cent over a year earlier to 790 million, including 14 million 4G users.

China Mobile Ltd.: www.chinamobileltd.com