TD-LTE network build contributes in part to China Mobile profit loss
China Mobile’s 2014 profit fell 10%, slightly below market expectations and marking the company’s biggest annual profit drop since 1999.
Large expenditures on next-generation network development were the biggest culprits behind the declined earnings. Profit attributable to shareholders slipped 10.2% to $17.6 billion in 2014. The results sent the stock tumbling by 3.3% on March 19 and another 1.5% on March 20.
On the plus side, China Mobile said it acquired about 40 million new subscribers in 2014, and by year’s end the group’s TD-LTE customer base exceeded 90 million. The carrier began rolling out its TD-LTE network in February 2014, and as of mid-March 2015 had 123.4 million 4G subscribers, according to Forbes.
China Mobile’s business income from data plans jumped by 22.3% to $40.7 billion during the same period, making it “the primary driver of revenue growth,” the carrier said. It was still facing challenges around Internet-based messaging apps considering that “the substitution effect of [over-the-top] business has become more intensified.”
Forbes contributor Chuck Jones said that China Mobile’s explosive growth was a positive thing for Apple considering the latter’s China revenue grew 12% in the March 2014 quarter, 26% in the June quarter and 70% in the December quarter.
China Telecom sees net profit climb by 1% in 2014
China Telecom earlier this week announced that its net profit rose slightly by about 1% year-over-year to $2.84 billion in 2014.
Cost-savings measures offset sluggish wireless subscriber growth. Expenses related to the maintenance of network operations increased by 29.3% over 2013 due to China Telecom’s efforts to improve its wireless network quality. Mobile terminal sales declined more than 16% to $5 billion.
China Telecom added about 15.5 million 3G and LTE subscribers in 2014. However, this was only 8.3% of the total high-speed user additions in China in that period (186 million), noted Forbes.