China Mobile Q3 profit flat as competition bites

HONG KONG: China Mobile, the world's biggest mobile operator by subscribers, reported a 3.5 percent rise in quarterly earnings, matching expectations, as a maturing market and intense competition eat into its profits.

The results could set the tone for rivals China Unicom and China Telecom, who are also expected to post flat or a fall in profits when they report results next week.

China Mobile reported July-September net profit of 29.65 billion yuan ($4.45 billion), based on Reuters calculations using company data, matching an average forecast of 29.6 billion yuan from five analysts polled by Reuters and up from 28.64 billion yuan a year ago.

"As a result of the increasing penetration rate of mobile telecommunications and the changes in the competition environment of the telecommunications industry, the group's customer growth showed signs of slowing down," the company said in a statement on Wednesday.

China Mobile is the world's biggest mobile operator by market capitalisation and number of users. Its subscriber base of more than 500 million users is bigger than the population of the United States, Australia and Germany combined.

Despite that, mobile penetration in China remains low compared to developed economies, where the number of mobile lines often outnumber the total population of the country as some users have more than one subscription

Monthly average revenue per user, a widely watched industry indicator, fell to 72 yuan for the first nine months of the year from 75 yuan a year earlier.

China Mobile's margin for earnings before interest, taxes, depreciation and amortisation (EBITDA) clocked in at 50.4 percent in the first nine months of the year, down from 51.3 percent the same time a year ago.

Hong Kong-listed China Mobile shares are up about 14 percent so far this year, beating a 7.7 percent rise on the benchmark Hang Seng Index .HSI.