China Mobile first half profit up 58%

By Staff and wire reports

HONG KONG, China -- Strong subscriber growth boosted China Mobile's first half profit by 58.3 percent, to $1.67 billion.

The world's second biggest mobile operator said its subscriber base grew 30.5 percent to 58.91 million users at the end of June.

But that wasn't enough for investors. China Mobile's stock dropped after the earnings to end down 9.8 percent at HK$31.40 in Hong Kong.

Analysts had expected profit growth of 64 percent.

China Mobile's average revenue per user declined to $19 a month from $24 in the second half of 2000. That was mainly due to the increase in low-end subscribers and a one-off tariff adjustment.

The vast majority of new subscribers signed up for cheaper, pre-paid calling plans, and higher-paying customers have already been enlisted in China's maturing cellular market.

According to China's telecom authorities, there were 120.6 million mobile subscribers in China at the end of July, rivaling the U.S. as the world market leader.

The mobile phone market attracted about 3.8 million new subscribers in July, according to the Ministry of Information Industry.

China Mobile, the largest player in China, saw its operating revenue increase 69.1 percent to $5.9 billion, over the same period in 2000.

Earnings before interest, taxes, depreciation and amortization rose 73.5 percent to $3.5 billion, from $2 billion the same time last year.

China Mobile has been locked in a duopoly battle with smaller rival China Unicom, which has been stealing market share by undercutting China Mobile.

China Mobile serves 13 provinces in China and is planning to purchase another 18 provincial networks from its government-owned parent, an exercise that will require a multi-billion-dollar fundraising effort.

China Unicom dropped 7.4 percent to HK$11.35 in Thursday trade in Hong Kong.

Reuters contributed to this report.