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China Mobile posts biggest profit decline since 1999
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CHINA Mobile, the world’s No.1 mobile carrier with more than 770 million users, today posted a 16 percent drop in net profit in the fourth quarter of last year, the biggest profit decline since 1999.
The lackluster performance was due to challenges from new business like WeChat, fierce market competition and rising cost on next-generation network.
Through new 4G network and services and a deal with Apple Inc on iPhone, China Mobile is conducting business transformation from traditional voice and message services to Internet and data services.
China Mobile’s net profit was 30.2 billion yuan (US$4.9 billion) in the fourth quarter, according to figures derived from full-year results released by the Beijing-based company. That compared with the 33.4 billion-yuan average of three analyst estimates compiled by Bloomberg.
China Mobile’s whole year net profit was 121.7 billion yuan in 2013, a 5.9 percent drop from a year ago. The revenue reached 630.2 billion yuan, representing a 8.3 percent growth from a year ago.
“We face challenges brought about by an accelerated substitution effect in the traditional communications business by Internet services,” Chairman Xi Guohua said in a statement. “We will push forward with the transition of business development from voice to data.”
New mobile Internet services, like Tencent’s WeChat with voice and message communications and picture sharing features, have attracted millions of users. WeChat active user base hit 350 million by 2013, rising 121 percent from a year ago, according to Tencent.
Though China Mobile posted net profit decline, it’s still the biggest one of the three state-owned carriers with 775.6 million users by the end of last year, more than the combined number of China Telecom and China Unicom.
China Telecom, the third-largest, yesterday reported fourth-quarter profit rose 18 percent to 2.8 billion yuan. China Unicom, the second-largest, said net profit to rise 24 percent to 2.03 billion yuan.
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