China Mobile reported shrinking profits for 2013, which it attributed to increased infrastructure investments, while also noting the changing competitive environment in its home market.

In a statement, it said it “modestly increased its investment in infrastructure resources in order to provide better support for the explosive growth in data traffic, satisfy the company’s business expansion needs and build up core competitiveness”. This led to the drop in profit.

In 2014, it is anticipating a 21.8 per cent increase in capital expenditure to CNY225.2 billion ($36.16 billion), with the amount of the total spent on mobile networks increasing to 44 per cent from 40 per cent.

And while 2013 saw steady economic growth, “the government’s promotion of information consumption,” and the issue of 4G licences in China, there had also been a “further accelerated substation effect” brought on by the impact of over-the-top players on its core business, and a more saturated communications market underpinned by fiercer competition.

Looking forward, China Mobile said that it “remains optimistic in the mid-to-long term development prospects” in the industry, as data becomes the most important driver of growth.

The company reported a profit for the year of CNY121.69 billion ($19.56 billion), down 5.9 per cent. This was its first annual profit decline since 1999. Revenue increased by 8.3 per cent to CNY630.18 billion.

Revenue from telecoms services was CNY590.81 billion, up 5.4 per cent. Revenue from wireless data traffic reached CNY108.2 billion, up 58.6 per cent year-on-year.

Its customer base reached 767 million, and the operator has “steadily increased its market share in 3G services” with a net growth of 104 million customers. Sales of TD-SCDMA mobile phones “significantly increased to 150 million”, effectively boosting the growth of 3G customers.

With regard to its LTE rollout, China Mobile said it will “spare no effort to build a superior 4G network”, aiming to have the world’s largest 4G network with 500,000 base stations that will “essentially deliver continuous coverage in all cities, urban areas of counties and key villages” by the end of 2014.

It also said it will “proactively push forward VoLTE live network testing to realise commercialisation of VoLTE by the end of this year, hence solidifying its first mover advantage”.