China Mobile momentum slows, Unicom doubles 9M profit

23 Oct 2018

China Mobile, the world’s largest wireless provider by subscribers, booked operating revenue of CNY567.7 billion (USD81.8 billion) for the nine months ended 30 September 2018, down 0.3% from CNY569.5 billion a year earlier. The operator attributed the dip to the cancellation of domestic data roaming charges – implemented in July this year in compliance with a government order – and the decline in ‘data value’ as a result of competition from high-data, low-tariff packages. Efforts to contain costs, meanwhile, led to a small increase in EBITDA of 1.3%, which grew to CNY214.1 billion, whilst net profit reached CNY95.0 billion, up from CNY92.1 billion a year earlier. China Mobile counted a total of 916 million mobile subscribers at end-September, up from 906 million three months earlier, whilst 4G subscriptions reached 695 million (677 million in the previous quarter). Mobile ARPU continued to decline – falling to CNY55.7 from CNY58.1 at end-Juned 2018 – despite growing data usage, with average monthly consumption reaching 3.13GB, compared to 2.62GB in the preceding quarter. In the fixed broadband segment, the operator’s customer base grew from 135 million to 147 million, whilst ARPU dipped to CNY34.3 from CNY35.

Rival operator China Unicom, meanwhile, reported a 116.6% y-o-y increase in net profit for the nine month period to CNY8.83 billion, bolstered by a CNY1.47 billion increase in the windfall from its share of net profits from joint venture infrastructure provider China Tower. Unicom recorded total service revenue of CNY200.0 billion for the first three quarters of 2018, an increase of 6.5% compared to the same period of 2017, and fuelled by annual service revenue growth from the mobile and fixed sectors of 7.2% and 5.2% respectively. EBITDA for the period was CNY66.25 billion, up 1.3% y-o-y. Unicom reported a mobile subscriber base of 309.83 million at end-September 2018, of which 213.85 million were 4G users, up from 302.02 million and 203.11 million three months earlier. In the fixed segment the company continued to report expansion in its broadband subscriber base – which grew to 80.35 million from 78.92 million at end-June 2018 – and contraction in its voice lines, which dipped to 56.23 million from 57.87 million over the same period.

China, China Mobile, China Tower, China Unicom