By Mike Caggeso
China Mobile Ltd. (CHL), the biggest phone carrier in the world, is leading the worldwide shift away from fixed-line phone service to mobile multimedia.
Not only is China Mobile sniping subscribers from fixed-line titan China Telecom Corp. Ltd. (CHA), but its penetration into new and rural markets – with its mobile newspapers service in tow – is tapping new customers that neither telecommunication company has been able to previously reach.
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All that adds up to a 37% rise in profit and a 20% increase in sales in the first quarter, according to a statement on the China Mobile Web site.
"China Mobile is penetrating new markets to get as many customers as possible and at the same time roll out new services to retain the subscriber base they have," Christopher Wong, a fund manager at Aberdeen Asset Management in Singapore, which oversees more than $40 billion of investments including China Mobile shares, told Bloomberg.
Not only is it gaining more subscribers, the average time they spend on their phones also increased from the fourth quarter.
"The rapid growth in China's economy and the vigorous demand for telecommunications services continued to create a prosperous environment for the Group," the company statement said. "By leveraging our strong foundation and competitive edge and pursuing a sound, balanced and sustainable development, we will maintain a solid, long-term business foundation with the goal of creating best possible returns for our investors."
With more than 392 million subscribers (that's more subscribers than the total population of the United States), China Mobile has about a 68% share of the country's mobile-phone market. China Unicom Ltd. (CHU) has the rest.
Meanwhile, the nation's biggest fixed-line provider, China Telecom, posted flat first-quarter growth – with sales up 1.6% and net income up less than 1%.
Last month, the company lost 920,000 phone subscribers, reducing its total fixed-line customers to 217.2 million.
And trends aren't looking very promising to China Telecom, as the country has more than 565.2 million wireless-phone subscribers compared with 362.2 million fixed-line customers, Bloomberg reported.
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China Mobile Ltd.:
First Quarter Key Operating Statistics