China Mobile posts strong 2010 growth, expands retail presence

China Mobile Ltd. (CHL) said it added nearly than 62 million customers in 2010, finishing the year with 584 million customers and extending its leadership as the world’s largest wireless operator. The growth was down from the more than 65 million customers added in 2009, while market share of net additions dropped from 60% in 2009 to 53% last year.
Customer usage of voice services continued to grow with average monthly use at the end of year at 521 minutes. Despite the growth, average revenue per user continued to decline, though at a slower rate, to $11.11. This was somewhat offset by a 2.6% decrease in cash cost per user to $7.65 per month.
The carrier added that it ended the year with just over 20 million customers using 3G services on its TD-SCDMA network. China Mobile noted that its 3G network was available in 656 cities using 135,000 base stations.
Operating revenues increased 7.3% year-over-year to $73.8 billion, while net profits increased 3.9% to $18.2 billion, or 91 cents per share. Mobile Internet usage accounted for 31.2% of total operating revenues in 2010, an increase of nearly 50% compared with 2009 results.
China Mobile noted that capital expenditures dropped from $19.7 billion in 2009 to $18.9 billion last year, with 44% of its 2010 capex spent on infrastructure equipment. The carrier plans to increase capex in 2011 to $20.1 billion, with 55% of spending focused on infrastructure equipment.
Expansion into retail
In addition to its full-year results, China Mobile also reported that it has entered into an agreement to purchase 100% of mobile device seller Topssion Communications Co. Ltd. for $36 million. China Mobile currently controls 29% of Topssion, with other investors including ZTE Corp., Eastcom, Beijing Digital, Ningo Bird and Huawei Investments.
China Mobile said the acquisition will allow the carrier to strengthen its influence over the “value chain,” as well as accelerate the adoption of 3G services.