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China Mobile announces profit increase

CHINA Mobile Ltd today announced year-on year profit growth for the first three-quarters of the year, recovering from the company's first profit drop since 1999.

The world's biggest mobile carrier, with more than 500 million subscribers, attributed the growth to the added users including many from rural areas.

In the first nine months, China Mobile posted a net profit of 83.94 billion yuan (US$12.34 billion), 1.8 percent more from a year ago. Third-quarter net income rose 2.6 percent to 28.6 billion yuan, according to figures derived from nine-month earnings reported by the Beijing-based company today.

"In the period, we leveraged on competitive advantages, overcame various challenges and continued to maintain favorable growth in the financial results," said China Mobile in a statement.

China Mobile's second quarter net profit dropped to 30.1 billion yuan from 30.6 billion yuan a year earlier, because of rising competition from rivals China Telecom and China Unicom and its weak 3G performance.

In the first nine months, China Mobile's revenues rose 8.9 percent year-on-year to 326.98 billion yuan.

At the end of September, China Mobile had 508.4 million subscribers, ranking No. 1 in the world.

China Mobile cut call fees and raised handset subsidies, especially on 3G handsets to attract 15.24 million users in the quarter.

The company will expand in lower-income rural areas as China Telecom and China Unicom focus on high-speed services in cities, said China Mobile Chairman Wang Jianzhou.

In January, China issued 3G license to the three carriers. Based on the high-speed technology, people can access various services such as video calls and film downloads.

China Telecom, the nation's largest fixed-line operator, said its net profit in the first three quarters declined 33.9 percent 11.39 billion yuan due to decreasing demand for fixed-line phone services and spending on the 3G networks.

China's mobile communications business accounted for more than 60 percent of the total telecommunications industry income in the first nine months, a record high since the country started to collect such figures a decade ago.

The portion of fixed line income fell 4 percentage points year-on-year to 28.2 percent from January to September, said the Ministry of Industry and Information Technology.

China Telecom gained a record 7.5 million mobile-phone customers from July to September, compared with 6.44 million in the previous quarter.

In the 3G sector, China Mobile and partners like Motorola Inc and HTC Corp have launched Ophone, a phone built in with China Mobile's system and application store.

China Unicom, the country's No. 2 mobile carrier, aims to introduce iPhone 3G into the domestic market.


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