A man reads texts on his mobile phone outside of a China Mobile's store in Beijing. China Mobile now has more than 500 million users.[Bloomberg]
HONG KONG - China Mobile Ltd, the world's biggest phone carrier by market value, said first-quarter profit rose 1.1 percent, missing analysts' estimates, after adding fewer users as competition strengthened.Net income rose to 25.5 billion yuan ($3.7 billion), from 25.2 billion yuan a year earlier, the carrier said in a statement to the Hong Kong Stock Exchange on Tuesday. Profit was expected to be 26.9 billion yuan, the median estimate of five analysts surveyed by Bloomberg News.
China Mobile added 17 percent fewer subscribers in the first quarter as consumers in the world's fastest-growing economy weighed high-speed services from rivals China Telecom Corp and China Unicom (Hong Kong) Ltd.
It gained 16.6 million new users in the three months ended March, slowing from the 19.9 million increase during the same period a year earlier.
China Mobile now has more than 500 million users, more than the combined population of Britain, Germany and the United States.
Chairman Wang Jianzhou plans to increase handset subsidies by almost a third this year and lower call rates to maintain the Beijing-based company's lead in the world's biggest phone market.
"We believe promotions in the first-quarter led to slower" revenue growth, Yvonne Chow, who rates China Mobile shares "equal-weight" at Morgan Stanley, wrote in an April 14 report.
China Mobile rose 3.3 percent to HK$80.20 ($10.33) in Hong Kong trading before the earnings announcement.
The stock has advanced 10.1 percent this year, compared with the 20.7 percent increase for China Telecom, the country's biggest fixed-line phone carrier, and the 8.8 percent decline for China Unicom, the second-biggest domestic mobile-phone operator.
First-quarter sales rose 7.7 percent to 101.9 billion yuan, China Mobile said. This compared with the 113.9 billion yuan median analyst estimate in the Bloomberg News survey.
China Unicom, based in Beijing, added 4.5 million customers on its 2G and 3G mobile-phone services in the first quarter for a total of 152.1 million at the end of last month.
China is the world's biggest mobile market, with around 700 million subscribers. But stiff competition among its three major carriers has seen profits stall or even shrink as they go after less lucrative subscribers in smaller cities to keep their subscriber bases growing.
Industry margins have also been under pressure as operators raise handset subsidies on higher-end smartphones to entice more users to value-added data services to boost revenue.
BLOOMBERG NEWS - Reuters
