China Mobile’s net profit falls 16% in Q4
Print Edition
CHINA Mobile’s net profit fell 16 percent in the fourth quarter, the biggest decline since 1999, as the telco was hit by intense competition and challenges posed by Internet services such as WeChat.
The telco made a net profit of 30.2 billion yuan (US$4.8 billion) in the last three months of 2013, according to figures derived from full-year results released. It also missed estimates of 33.4 billion yuan.
China Mobile, the world’s No. 1 mobile carrier with 775.6 million users by 2013, achieved a net profit of 121.7 billion yuan for the whole of last year, down 5.9 percent from a year ago. Its revenue grew 8.3 percent from a year ago to 630.2 billion yuan.
Internet services like WeChat, fierce competition and rising costs to build a next-generation network have weighed on the telco’s profit.
“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.”
The telco has embarked on a drive to transform its business from traditional voice and message to Internet and data services through a new 4G network and services, as well as an iPhone deal with Apple Inc, industry insiders said.
With voice, message and picture sharing features, WeChat has 350 million users by 2013, up 121 percent year on year, its developer Tencent said.
China Telecom, the third-largest, said this week that its fourth-quarter profit rose 18 percent to 2.8 billion yuan. China Unicom, the second-largest, posted a 24 percent rise in net profit to 2.03 billion yuan.
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