Falling ARPU weighs on China Mobile - Mobile World Live

Falling ARPU weighs on China Mobile

21 MAR 2019

China Mobile, the largest mobile operator in the world, recorded continued weakness in the mobile sector in 2018, as falling ARPU and voice revenue weighed on its top line, despite strong data and 4G subscriber growth.

Its net profit rose 3.1 per cent year-on-year to CNY118 billion ($17.7 billion), with operating revenue slipping 0.5 per cent to CNY737 billion.

Consumer mobile service revenue fell 1.7 per cent to CNY492 billion. A 55 per cent rise in mobile data revenue to CNY369 billion couldn’t offset a 27 per cent drop in voice and SMS turnover to CNY110 billion. Equipment sales were down 8.7 per cent to CNY65.9 billion.

Yang Jie, who took over as chairman of China Mobile earlier this month, said its main focus in 2018 was to further reduce costs and increase efficiency: “our efforts yielded favourable results with a reduction in unit cost”.

He noted 2019 marks the starting point of its march into an information society powered by 5G: “We will strive to achieve more than 2 billion connections, favourable growth in telecoms services revenue and stable to rising growth in profit in 2019.”

4G growth
Total mobile connections rose by almost 37 million to end 2018 at 925 million. LTE penetration climbed to 77 per cent after the operator added 63.2 million 4G connections.

The average 4G data traffic increased from 1.7GB at end-2017 to 4.3GB: 4G ARPU fell 8.3 per cent year-on-year to CNY61.30.

Revenue from IoT services increased 40.2 per cent year-on-year to CNY7.53 billion, with the number of IoT connections increasing by 322 million to close the year at 551 million.

Capex fell 5.9 per cent to CNY167 billion and is forecast to dip to CNY150 billion in 2019, but that doesn’t include an undisclosed allocation for its pre-commercial 5G rollout. The operator ended 2018 with 2.4 million 4G base stations.

Yang said it will continue to conduct 5G network tests and perform trials on business applications, currently running in 17 cities, to ensure the pre-commercial launch of 5G services this year.

Rival China Unicom last week posted a more than fivefold increase in profit in 2018. Third-ranked China Telecom’s profit rose 13.9 per cent year-on-year to CNY21.2 billion, with operating revenue increasing 3 per cent to CNY377 billion.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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