China Mobile, the world's largest mobile carrier by users, reported a 32 percent growth in its net profit in 2007 to a record 87.1 billion yuan, thanks to the rapid increase in subscribers.
The company posted a 21 percent increase in revenue to 357 billion yuan and saw its subscriber base rise 23 percent to nearly 370 million, with a net increase of 68.1 million.
The mobile carrier focused on the rural market, where half of its new subscribers are. But as they are mainly lower-end users, the average monthly revenue per customer, or ARPU, dropped slightly to 89 yuan from 90 yuan a year earlier. But the total voice usage reported a strong growth of 45 percent, exceeding 1.8 trillion minutes, and the average usage per user per month was 455 minutes, up 19 percent.
Li Yue, an executive director and vice-president of the firm, forecast the net increase in subscribers will exceed 80 million this year.
"ARPU dropped slightly, but the company's rapid growth in terms of users can definitely offset the drop," said Eugene Law, a research director at CASH Securities Ltd.
He sees the contribution from rural areas to rise further with increasing penetration as "use of mobile phones is becoming popular in rural areas".
Wang Jianzhou, chairman and CEO of China Mobile, said the penetration rate is only 19 percent in rural areas, so "the potential of developing the rural market is good".
Supported by the good results and positive outlook, China Mobile's Hong Kong-listed shares rose 2.97 percent to HK$107.6 yesterday.
But Law noted that the long-waited revamp of the mainland's telecommunications industry is affecting China Mobile. "The share remains volatile before the nature of the revamp is made clear."
Wang declined to comment on rumors of the restructuring and his retirement. "I haven't got any news about the revamp, but it is positive for the industry in enhancing the efficiency of resource utilization."
China Mobile is planning its A-share listing, but doesn't have a timetable for it.
Source: China Daily
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