China Mobile says H1 profit rises 4.2% to $8.5 bln

17:03, August 19, 2010      

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China Mobile, the world's largest mobile operator by subscribers, said Thursday its net profit in the first half this year edged up 4.2 percent to reach 57.643 billion yuan (8.5 billion U.S. dollars) from a year earlier.

The telecom giant also announced that Wang Jianzhou will cease to be the CEO of the group and remains to serve as the chairman.

Meanwhile, Li Yue, the vice president of China Mobile, has been designated to take the CEO position.

In a filing to the Hong Kong stock exchange on the day, Wang Jianzhou said the company's operating revenue maintained steady growth in the first half to reach 229.82 billion yuan, an increase of 7.9 percent from the first half of 2009.

In the first half, China Mobile's EBITDA (earnings before interest, taxes, deprecation and amortization) amounted to 116.62 billion yuan, advancing 6.1 percent year on year, it said.

"Underpinned by its solid capital structure, strong financial position and cash flow generating capability, the Group is well- positioned to manage risks and achieve continued healthy growth," Wang said in a statement.

According to the statement, China Mobile had a total of 554 million customers by the end of June this year, of which 31.76 million were net additions.

Total voice usage volume was 1,664.654 billion minutes, up 20 percent year on year. Average minutes of usage per user per month was 520 minutes, up 6.1 percent, and average revenue per user per month stood at 72 yuan, which displayed a moderately declining trend, said the Beijing-based company.

Wang said China Mobile placed emphasis on its value-added services business which had become major driving force of revenue growth. Revenue from the value-added business soared 13.4 percent year on year, contributing 29.5 percent to its operating revenue.

Revenue from the value-added business had been further diversified to such key services as wireless music, mobile paper, "Fetion" and 12580 integrated information service line. Other services such as mobile payment, mobile reading, mobile video and mobile gaming had also developed rapidly.

Regarding 3G service, China Mobile said its parent company had completed construction of the third phase of its 3G network TD- SCDMA. By the end of June, the number of operational TD-SCDMA base stations had reached 115,000 and the network covered 238 Chinese cities.

By the end of June, China Mobile's 3G customers reached 10.46 million, Wang said.

China Mobile said it was also making progress on the testing of LTE technology, which was part of the GSM evolutionary path beyond 3G technology. At the World Expo Shanghai 2010, China Mobile had carried out a successful debut of its showcase TDLTE network, and large scale testing would soon begin.

According to Wang, China Mobile was blessed with a positive business environment as the Chinese economy continued to show healthy momentum in the first half. But it was also faced with external challenges including high and increasing mobile penetration rates and intensifying industry competition.

Wang noted the development of some sectors of the market including the rural market, the migrant worker market and the family market, are showing great growth potential.

In addition, the flourishing of mobile internet and the " Internet of Things" being gradually integrated into people's daily lives also provide the Group with new models and areas for business growth, he said.

China Mobile closed at 84.45 HK dollars (10.9 U.S. dollars) per share by midday Thursday, up 0.18 percent, with its total market value standing at 1,693.4 billion HK dollars (217.9 billion U.S. dollars). (1 U.S. dollar equals 6.79 yuan)



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