Handset subsidies key to persuading users over to data intensive tariffs
China Mobile, the world’s largest phone company by users, is poised to increase capital spending by half this year having beat analysts expectations with Q4 net income 6 per cent higher than a year earlier.
Revenues rose to 36 billion yuan from 33.9 billion yuan previously, with profit projected at 32.3 billion yuan.
Reflecting its growth, the state-owned operator is pouring cash into new high-speed networks, with about 190.2 billion yuan ($30.6 billion) earmarked. The lion’s share of this will go on piloting new, 4G services.
China Mobile’s CEO Li Yue has meanwhile kept to his promise last August to boost handset subsidies by 30 per cent last year in order to maintain the company’s lead in smartphone sales and persuade customers to switch to more profitable data services.
Both of the operator’s rivals China Unicom and China Telecom already have lured high-end consumers by offering them Apple’s iPhone, which doesn’t run on China Mobile’s 3G network.
Meanwhile mobile data traffic is said to have become “a major driver of operating revenue growth” for China Mobile, having almost tripled in volume from the previous year.
Even so, China Mobile’s share of the nation’s total 1.12 billion wireless users fell to 64 per cent in January from 66 per cent a year earlier, according to data released last month. It had 714.7 million mobile-phone subscribers at the end of January, including 95 million 3G users.
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