UPDATE: China Mobile Net Profit Rises 1.4% on Weak Economic Growth

--China Mobile net profit for the January-September period up 1.4%, hit by weak economic growth, competition

--China Mobile operating revenue rose 6.4% to CNY408.59 billion from CNY383.85 billion in the same period a year earlier

--Average revenue per user falls due in part to the increasing use of multiple SIM cards

(Adds background in paragraphs 2, 3, 4, 12 and 13, details about average revenue per user in paragraphs 8, 9, and 10, 3G user data in paragraph 11)

 
   By Paul Mozur 
 

BEIJING--China Mobile Ltd. (CHL) said Monday net profit for the January-September period rose 1.4% from a year earlier owing to weak macro-economic growth in China and intensifying market competition.

The world's largest mobile carrier by subscribers is racing with China Telecom Corp. and China Unicom (Hong Kong) Ltd. to boost revenue per user by adding users of third-generation mobile services, which offer faster data speeds at a higher price than older second-generation services.

China Mobile has accrued the largest number of 3G users among its rivals, but its use of homegrown technology has put it at a disadvantage by limiting its access to popular 3G smartphones for customers.

As a result China Mobile has pushed hard to launch a speedier fourth-generation wireless technology known as TD-LTE services, which provide faster download speeds and are expected to be adopted globally, ultimately helping it expand handset offerings. The company has said it hopes to commercially launch 4G services in the second half of 2013.

The world's largest mobile carrier by subscribers said net profit for the nine months ended Sept. 30 was 93.31 billion yuan ($14.81 billion), up from CNY91.98 billion in the same period a year earlier.

The company didn't provide a net-profit figure for the third quarter, but based on its first-half net profit of CNY62.2 billion, China Mobile's third-quarter net profit was CNY31.11 billion.

Operating revenue rose 6.4% to CNY408.59 billion from CNY383.85 billion in the same period a year earlier.

"As the number of low usage customers increased, the scenario of 'one customer with multiple SIM cards' became more and more popular and the Group (China Mobile) had continued to steadily promote tariff adjustment," the company said in a statement.

It added that monthly average revenue per user, or ARPU--a key industry gauge for mobile carriers' future prospects--continued to slide in the January to September period due in part to the increasing use of multiple sim cards, but it added that surging wireless data traffic helped to "stabilize" the ARPU.

Wireless data traffic nearly tripled in the first three quarters compared to the same period a year earlier, according to the statement.

China Mobile had 75.6 million 3G users at the end of September, compared with 66.9 million for China Unicom. China Telecom had 56.4 million 3G users at the end of August, the most recent figure available.

China Mobile for years has said it is in talks with Apple Inc. (AAPL) to offer the company's popular iPhone handsets, which are currently offered by China Unicom and China Telecom. China Mobile Chief Executive Li Yue said in August he hoped to cooperate with Apple Inc. (AAPL) to launch an iPhone that works with China Mobile's services after its roll out of fourth-generation mobile technology.

The most recent statement did not elaborate on plans to cooperate with Apple or the launch of fourth-generation services.

-Write to Paul Mozur at [e-mail]

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