China Mobile targets low-income subscribers at the expense of ARPU

23 Apr 2003

China Mobile (Hong Kong, CMHK) [0941.HK], the mainland’s biggest cellco, has released its financial results for the first quarter 2003, revealing that whilst total turnover is growing, per-customer revenues continue to fall. Despite stiff competition in the world’s biggest mobile market CMHK has witnessed strong subscriber growth in recent years. Following the purchase of a number of provincial networks from its parent, China Mobile, and by increasingly targeting the lower-income market with pre-paid call plans, its total subscriber base grew from 111.45 million at the end of September 2002 to 123.81 million six months on. However, with the majority of new additions being low usage customers, ARPU fell to HKD99 per month, down from HKD106. Total revenue for the quarter grew 10.1% year-on-year to HKD35.5 billion whilst net profit increased 9.7% to HKD8.5 billion, a slowing from the previous year’s 17% rise.