world growth

world growth

Thursday, March 19, 2009

China Mobile reports 2008 net profit up 30 percent

HONG KONG (AFP) — China Mobile, the world's largest mobile phone network operator, said Thursday its profits jumped by 30 percent last year, but warned China's telecoms market faced a tough 2009.

Net profit rose to 112.79 billion yuan (16.50 billion US dollars) in 2008, up from 87.06 billion yuan in 2007, the company said in a statement.

The firm, which has more subscribers than any other global carrier, said it had increased its customer base to more than 457 million, up 23.8 percent on the previous year.

The company's chairman and chief executive officer, Wang Jianzhou, said he was delighted with the firm's 2008 performance, but said it was unlikely to escape the fallout from the global economic slowdown.

"The influence of (the) financial crisis that swept across the globe in 2008 will likely widen and deepen, and its impact on China's economy will continue," Wang said in the statement to the Hong Kong Stock Exchange, where the firm is listed.

"The telecommunications industry will be affected."

He said the firm would be looking to boost its wireless broadband services in the coming year, and would also consider expansion into foreign markets.

"The company will actively search for quality overseas telecommunications assets as investment opportunities and as a way to explore international development," Wang added.

Mobile phone use has exploded in China in recent years on the back of falling handset prices and user charges.

In February, the total number of mobile users in China reached 565 million making it the world's biggest cellular phone market, according to government figures.

Wang said the company had seen strong growth among rural customers during 2008, and had also increased the size of its corporate market.

He also welcomed China's huge economic stimulus package, and said he believed it would have a positive impact on the telecoms sector.

China Mobile's turnover increased by 15.5 percent to 412.34 billion yuan over the 12 months.

It paid a dividend of 1.40 Hong Kong dollars per share (18 US cents), compared to 1.16 dollars the previous year.

China Mobile was in January awarded one of the three licences to run third-generation networks across the country.

Third-generation, or 3G, networks enable faster data transmission and services such as web-surfing and video. They are seen by analysts as another huge potential source of growth in China.

China Mobile was awarded the licence to run the Chinese-developed TD-SCDMA standard for 3G, and its share price initially suffered in Hong Kong on worries about infrastructure costs involved in building the new network.

Analysts were also concerned the Chinese standard would not perform as well as the European and North American standards which were licensed to China Mobile's rivals.

The firm has previously announced plans to invest 58.8 billion yuan this year to build around 60,000 base stations covering 238 cities.

In his statement, Wang said the firm was focused on migrating its customers onto 3G networks without their needing to change SIM cards, mobile numbers or re-registering.

Earlier this year, Wang said factory closures as a result of reduced demand for Chinese-made goods had hit the mobile market, as users had moved back to rural areas and reduced the number of calls they made.

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