Tags: China Mobile | CHL | China Unicom | CHU | China Telecom | CHA | telecoms

China Mobile Grows as Cities Bloom

By    |   Thursday, 14 Jul 2011 11:02 AM

There aren’t too many things better for a company than having a customer base of 600 million. China Mobile (CHL), the world’s biggest cell phone company, crossed that threshold in the first quarter. China Mobile rural customers accounted for most of the 16.8 million additions in the first three months of the year, an almost 3 percent increase from its 584 million customers as of Dec. 31.

Cell phones touch the ear of about 75 percent of China’s 1.2 billion phone users, and most of China Mobile’s new customers have come from the countryside. The only problem is that the rural folks spend less money on phone services than their big city brethren.

Because of that, China Mobile’s average revenue per user dipped 12 percent in the first quarter from the fourth quarter of 2010.

Still, China Mobile is well equipped to profit from its rural business, because of its lower cost base. Analysts agree that it will be more difficult for the company’s competitors, China Unicom (CHU) and China Telecom (CHA), to compete in rural markets.

China Mobile’s profits rose 5.4 percent to $4.2 billion in the first quarter, from $3.9 billion a year earlier. Sales gained 8.3 percent to $18.3 billion.

China Mobile said 549 million customers used value-added services in the first quarter and 476 million used its wireless music service specifically. Those services constituted “the driving force” of the company’s first-quarter revenue growth, it said.

Network migration

The recent appointment of Xi Guohua as Communist Party secretary and vice chairman of China Mobile may help the company by speeding up development of homegrown fourth-generation (4G) technology.

"China Mobile is losing market share in China because of the unpopular 3G TD-SCDMA technology. It is keen to develop the 4G network as soon as possible," Duncan Clark, president of the Beijing-based research firm BDA China, told China Daily.

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There aren t too many things better for a company than having a customer base of 600 million. China Mobile (CHL), the world s biggest cell phone company, crossed that threshold in the first quarter. China Mobile rural customers accounted for most of the 16.8 million...
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2011-02-14
Thursday, 14 Jul 2011 11:02 AM
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