China Mobile profit rises 3.5% in H1, but challenges lie ahead

China Mobile, the nation’s leading telecom services provider, on Thursday said that first- half net profit rose 3.5 percent year- onyear to 62.7 billion yuan ($ 9.4 billion).

Revenue totaled 388.9 billion yuan, up 5 percent, according to financial statements the company released on Thursday.

The company declared an interim dividend of HK$ 1.623 ( 21 cents) per share and a proposed special dividend of HK$ 3.2 per share to mark the 20th anniversary of its listing.

Boosted by the higher- than- expected performance, shares of China Mobile closed at HK$ 87 on Thursday, up 2.78 percent from the opening.

Analysts said that first- half growth was buoyed by gains in telecom service operations and traffic generated by fourth- generation ( 4G) users, the Beijing News reported on Thursday.

Revenue from telecom services climbed 6.9 percent to 348 billion yuan, with the growth rate exceeding the industry average. Revenue from wireless data traffic reached 187.7 billion yuan, accounting for more than half of the telecom services revenue, according to the statement.

The carrier’s 4G users expanded by 58.62 million to 594 million in the first half, with a market penetration rate of 69 percent, said the company.

It is expected that the number of 4G users will exceed 100 million by the end of 2017.

Revenue from traditional businesses like messaging have slid, and the trend is predicted to persist in the second half.

Also, the end of domestic roaming fees as of September 1 will depress the carrier’s revenue in the second half, according to experts.