China Mobile FY15 profit dips 0.6%

18 Mar 2016

China Mobile has reported a slight slide in its full-year net for 2015, due to increased competition from peers and changing regulatory policies.

Net profit dropped 0.6% to 108.5 billion yuan ($16.7 billion) in 2015, while operating revenue rose 2.6% to 668.3 billion yuan.

The operator said in its 2015 results it had 312 million 4G customers at the end of the year, up from 90 million the year before, with its subscriber base growing 2.4%, to reach 826 million.

Driven by the faster pace of 4G adoption, the telco's data business has become its main revenue driver, exceeding revenue from voices services for the first time, accounting for 52% of revenue from telecoms services.

In 2015, the company’s mobile data traffic increased 143.7% compared to the previous year. Mobile data traffic increased 118.5%, while average data usage of 4G customers reached 748MB, accounting 81% of data traffic on China Mobile’s network. The operator's 4G ARPU was 85 yuan, against the 56 yuan of blended APRU.

Revenue from mobile data traffic increased 31.7%, reaching to 198.27 billion yuan.

Speaking at a media briefing for the company’s 2015 results, China Mobile chairman Shang Bing said 4G expansion will be its 'focal point' for 2016, and the company plans to invest 75.6 billion yuan ($11.7 billion) on 4G business and network expansion.

His remarks come as the company expects to see increased competition especially from small rivals China Unicom and China Telecom.

“The biggest challenge [China Mobile facing] now is to maintain our competitive advantage in 4G. We expect the 4G partnership between China Unicom and China Telecom will increase competition in the market from the second half of the year,” said Shang, who took over the role of chairman at China Mobile last August as part of the industry’s biggest leadership reshuffle since 2008.

In a bid to maintain its 4G growth momentum amid intensifying competition, China Mobile will boost its TD-LTE network coverage to reach 1.4 million by the end of this year, from the 1.1 million base stations in 2015.

The company has a target to achieve 500 million 4G connections by year-end from the over 360 million TD-LTE customers in February, he added.

"Leveraging our 4G advantages, we will continue to improve network quality, accelerate the migration of 2G/3G customers to 4G and enhance customer value,” Shang said.

He said government’s policies aimed at increasing network speeds, decreasing tariffs and improving information services is expected to create some pressure in the current year.

Meanwhile, China Mobile booked a 10.1 billion yuan one-time gain on the sale of transmission tower assets to China Tower last year. The company booked 5.6 billion yuan leasing-fee for 2015 after it agreed to transfer tower assets to China Tower last October. And it is expecting to book about 35 billion yuan leasing-fee in 2016.

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