China Mobile’s net profit rises; plans higher dividend payment

18 Mar 2003

China Mobile, the world’s largest wireless carrier in terms of subscribers has reported a 17% increase in net profit to CNY32.7 billion (USD3.95 billion) for 2002, up from GNY28.02 billion in 2001. Turnover for the year reached CNY128.6 billion, up from CNY100.3 billion, and EBITDA reached RMB77.3 billion, an increase of 28%. The cellco witnessed increasing competition from alternative players during 2002, and revenue-per-user was eroded by around 18%, falling from CNY145 to CNY115; its churn rate rose to an average 0.69% a month from 0.58% in 2001. Following the release of its results, China Mobile said it will pay a first dividend of HKD0.32 a share, more than analysts were expecting. The operator hopes that the increased payment will help it to attract investors; it plans to steadily raise dividends as competition with the number two operator China Unicom intensifies. reduction

China Mobile provides wireless services in 21 provinces of China and Hong Kong, and at the end of 2002 claimed a customer base of 117.7 million. It has witnessed a marked increase in the use of mobile internet services and multimedia messaging over the last year. The company has said it will cut its capital expenditure during 2003 and 2004, announcing plans to spend around USD10.5 billion in the two year period, down from a previous figure of USD10.8 billion.