The wireless carrier that dwarfs Verizon and AT&T

China Mobile beats estimates with 6.3% increase in net income for first half of year

By  

The focus in the U.S. wireless industry over the past few months has been the $39 billion acquisition of T-Mobile USA by AT&T, specifically whether the deal, if approved by regulators, would result in a duopoly in which the market was dominated by two giants -- AT&T and Verizon.

Yet these two giants -- each with roughly 100 million subscribers and each in one of the most important mobile markets -- are dwarfed by another wireless carrier that operates in the world's largest mobile market and which just beat net profit estimates for the first half of the year.

China Mobile Limited (NYSE: CHL), with nearly 617 million subscribers, on Thursday announced a 6.3% increase in net income for the first six months of 2011 to 61.28 billion yuan (or $9.56 billion) from 57.64 billion yuan ($8.99 billion) in the year-ago period.

Consensus estimates called for a net profit of 60.46 billion yuan.

China Mobile reported specifically cited its wireless data business as "an important driver" of the company's growth. Wireless data revenue was 19.3 billion yuan, up 42.8% over last year. Wireless data revenue accounted for 7.7% of total operating revenue of 250.08 billion yuan.

Meanwhile, the state-owned telco's value-added mobile services -- SMS and MMS, music, books, games and video -- generated 80.4 billion yuan (or 32.2% of all revenue), up 19% from a year ago.

The only down note in China Mobile's half-year report was monthly average revenue per user, which slipped to 70 yuan from 72 yuan in the first half of 2010. The company said competition forced it to drop prices.

China Mobile competes with China Unicom and China Telecom, though it has about 70% market share.

One thing it doesn't have is Apple's iPhone, which currently is offered by China Unicom. According to the Wall Street Journal, China Mobile Chairman Wang Jianzhou said at a news conference Thursday that the telco has been in ongoing discussions with Apple, but that no agreement has been reached.

Shares of China Telecom were down 1.10, or 2.3%, to 47.44 on the New York Stock Exchange Thursday morning.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Mobile & WirelessWhite Papers & Webcasts

See more White Papers | Webcasts

Answers - Powered by ITworld

ITworld Answers helps you solve problems and share expertise. Ask a question or take a crack at answering the new questions below.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Ask a Question
randomness