A China Mobile Ltd booth at a cell phone expo in Shenyang, Liaoning province. China Mobile had 584 million mobile phone subscribers at the end of last year. [China Daily]
China Mobile Ltd, the world's biggest phone carrier by users, posted fourth-quarter profit that beat analysts' estimates as mobile Web users downloading music and videos lifted sales.
Net income increased 3.7 percent to 32.4 billion yuan ($4.93 billion) in the quarter ended Dec 31, according to figures derived from full-year earnings reported by the Beijing-based company on Wednesday. Profit was expected to be 31.8 billion yuan, according to the average of five analyst estimates compiled by Bloomberg News.
China Mobile Ltd Chairman Wang Jianzhou is expanding the range of data services the company offers over its mobile network beyond traditional short message service texting, or SMS, to include mobile videos, games and music. Use of such services is rising among owners of high-end smartphones, where China Mobile still holds the lead over rivals China Unicom (Hong Kong) Ltd and China Telecom Corp.
"Strong growth in non-SMS data revenue and slower tariff erosion contributed to the better top/bottom lines," Michael Meng, a Hong Kong-based analyst with BOCI Research Ltd, wrote in a report on March 9. "We view the stock as attractive."
Fourth-quarter sales rose 6 percent to 132.6 billion yuan. That was lower than the 132.7 billion yuan average of seven analyst estimates compiled by Bloomberg.
China Mobile climbed 0.6 percent to HK$72.70 ($9.30) as of the 12 pm break in Hong Kong on Wednesday, before the earnings announcement. The stock has dropped 5.8 percent this year.
China Mobile had a total of 584 million mobile phone subscribers at the end of last year, including 20.7 million users of the high-speed, third-generation service that smartphones require to surf the Web, the company said in February.
That outpaced China Unicom's 311.3 million total subscribers and 14.1 million users of its 3G service. China Telecom was in third place with 90.5 million total subscribers.
Value-added data such as the company's mobile music service "was an essential driver of total revenue growth" last year accounting for 31 percent of operating revenue in 2010, Wang said in Wednesday's statement.
The chairman aims to keep China Mobile's lead with heavy data users by rolling out the country's first fourth-generation network. The company in December received approval from the Ministry of Industry and Information Technology to begin a trial of its 4G TD-LTE network, and said this month it added Beijing to the original six cities in the program: Shanghai, Hangzhou, Nanjing, Guangzhou, Shenzhen and Xiamen.
It will likely take three to five years for China to start "large-scale" use of fourth-generation network technology, said the Minister of Industry and Information Technology, Miao Wei, on March 10.
The company's average monthly fees generated by each user fell to 73 yuan for the full year, matching the median estimate of three analysts in a Bloomberg News survey.
China Unicom and China Telecom will report earnings later this month.