China Mobile (HK) Ltd, the world's biggest mobile-phone company by users, reported its slowest pace of profit growth in more than four years as the carrier cut rates to keep customers and new users spent less.
Net income for the third quarter rose 1.8 percent to 8.73 billion yuan (US$1.1 billion) from 8.58 billion yuan a year ago.
The figures were calculated by subtracting first-half from nine- month earnings. Sales rose 9.4 percent to 40.2 billion yuan from 36.7 billion yuan.
China Mobile's revenue grew at an average of 50 percent a year in the past four years as the company spent US$50 billion acquiring cellular networks from its parent.
The Hong Kong-based company is now growing by signing up users in China's less wealthy provinces and offering discounts to stop nearest rival China Unicom Ltd from grabbing subscribers.
``The honeymoon period -- when China Mobile could easily get profitable customers from its parent -- is over,'' said Winson Fong, a Singapore-based fund manager at SG Asset Management Ltd., which manages US$2 billion and owns China Mobile shares. ``It's a market with 200 million plus users. New subscribers' spending is bound to come down.''
China Mobile's shares are down 71 percent from their peak in 2000, losing more than US$40 billion in value. The stock, Hong Kong's second biggest, has risen 25 percent this year, compared with a 30 percent gain by the Hang Seng Index. The stock rose 0.7 percent to HK$23.15 in Hong Kong. The company posted earnings after the market closed.
User Spending At the end of September, China Mobile had 135 million users in the 21 Chinese provinces it serves, compared with the 123 million users for Vodafone Group Plc as of June 30.
Together with controlling shareholder China Mobile Communications Corp, which serves the rest of China, the two control two-thirds of the world's biggest wireless market by subscribers.
The average monthly bill of China Mobile's customers dropped 13 percent in the first nine months to 103 yuan from a year ago.
That's less than half that of Hong Kong's SmarTone Telecommunications Holdings Ltd., and barely a sixth of NTT DoCoMo Inc.'s. DoCoMo is Japan's largest cell-phone provider and the world's second-largest.
Mobile-phone tariffs are also being pressured by the expansion of the Little Smart intra-city cordless service by two providers of traditional phone services. Little Smart is priced at less than half the cost of cellular-phone services.
A survey of analysts had an 8.9 billion yuan median profit forecast for China Mobile's third quarter.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to