China Mobile revealed its profit for the first quarter fell 9.4% to its lowest point in five years, blaming heightened competition and the impact of OTT services on its core telecom business.
Revenue grew 7.8% to 154.8 billion yuan ($24.8 billion), but profit declined to 25.24 billion yuan, the operator's unaudited first quarter results show.
The report states that during the quarter, China Mobile “experienced severe challenges in its operations and development as the impact of mobile internet on the traditional communications business became more evident, the traditional communications market became more saturated and horizontal competition among operators in the industry became increasingly fiercer.”
Accelerated OTT substitution meant China Mobile's total voice usage increased only 0.6% year-on-year, while SMS usage declined to 153 billion from 192.7 billion messages over the same period.
To counter the OTT threat, the operator said it has ramped up construction of its TD-LTE network, and has been pursuing ways to enhance its 3G/4G marketing capabilities through means including optimising its tariff structure and increasing the sale of devices.
Due to a new data focus, Total wireless data traffic grew 48.1% year-on-year, with mobile data traffic up 83.8%.
China Mobile's total 3G customer base reached 225 million during the quarter, from a total customer base of 781 million. The company also ended the quarter with nearly 2.8 million 4G customers.