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China Mobile first half profits up 4.2 per cent

Wang Jianzhou, who is stepping down as CEO of China Mobile, warned of "numerous external challenges"

China Mobile, the largest mobile operator in the world by subscriber base, has reported first half profits of RMB57.8bn (US$8.5bn), up 4.2 per cent on the same period in 2009. The firm, which had 555.9 million domestic subscribers at the end of June, according to Informa Telecoms & Media, also announced that Wang Jianzhou is to be replaced as CEO with immediate effect by Li Yue, formerly an executive director and vice president at the carrier. Wang will remain as executive director and chairman of China Mobile.

Despite the profit growth, and an increase in operating revenue for the period of 7.9 per cent to US$33.8bn, Wang warned that potential difficulties lie in store for the carrier. “We face numerous external challenges, including high and increasing mobile penetration and intensifying industry competition,” he said. Informa put Chinese mobile penetration at 58.24 per cent for the end of June this year.

Average minutes of usage per user per month was up 6.1 per cent year on year at 520 minutes. This gave a total voice volume for the six month period of 1,664,654 billion minutes. This could not stem the decline in ARPU, which the firm said was down slightly at RMB72 for the period.

Chin Mobile said that its value added services business has become the “major driving force of revenue growth,” revealing that VAS revenues increased 13.4 per cent, accounting for 29.5 per cent of operating revenue. The firm name-checked several of its most successful services, including Mobile Paper, the Fetion instant messaging service and Mobile Music. More than 80 per cent of new pop songs released in China are released on China Mobile’s music platform, making it the biggest music company in the country, according to Bill Huang, general manager of the China Mobile Research Institute.

Mobile internet access data usage is also on the increase, the firm said, and is earmarked as a key future growth driver. China Mobile ran a TD-LTE trial network at the World Expo in Shanghai earlier this year and said it would begin large scale testing soon.

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