BEIJING, May 15 -- Mobile Internet is becoming a lucrative business in China, with improving telecom infrastructures a main contributor, according to a report released on Thursday.

Total revenue in the mobile Internet sector reached 108.3 billion yuan (17.8 billion U.S. dollars) in 2013, said the China Internet Development Report 2014, jointly issued by the Internet Society of China (ISC) and the China Internet Network Information Center (CINIC).

China has more than 500 million cellphone-based Internet users and high-end subscribers used an average 1.6 Gb of data every month last year, according to the report.

"Chinese Internet users are shifting from desktop to mobile devices," said Shi Xiansheng, vice secretary-general of the ISC.

Shi attributed the expansion of the mobile Internet business to the improvement of the country's underlying Internet facilities.

As of the end of the third quarter last year, 130 million households had access to optical-fiber-based broadband Internet, and 3G mobile Internet had covered all townships.

Along with the development of mobile Internet business, smartphones saw rapid growth. Last year, smartphone shipments grew by 64.1 percent to 318 million units.

At the same time, shipments of wearable device, such as smart watches and glasses, topped five million units in 2013 and the number is expected to reach 40 million units by 2015, according to data released by Internet observer website iresearch.com.cn.

Ruan Jingwen, CEO of the website, said in addition to wearable devices, products that make medical treatment and transport "smart" are likely to boom in the future.

However, the report warned that slack regulation of mobile Internet resulted in security loopholes, especially on the Android platform.

Some 703,000 malicious mobile Internet applications were detected in 2013, 4.3 times the number found in 2012. The spread of cellphone viruses accelerated as it became easier to get infected when accidentally downloading such applications.

Zhou Zhen, a senior analyst with the CINIC, said despite the rapid expansion of mobile Internet in China, the security issue is emerging as a pressing problem that needs to be addressed carefully.