Net revenue at state-backed carrier China Mobile dropped 15% annually in the first half of the year, according to an earnings statement filed with the Hong Kong Stock Exchange.
Why it matters: The world’s largest telecom operator in terms of subscriber numbers attributed the decline to intensifying competition in an almost-saturated “traditional telecommunications market,” hinting that the company is banking on 5G to bring an upturn in business fortunes.
- The 4G penetration rate in China hit 84% at the turn of the year, according to a Ministry of Industry and Information Technology report in January.
- The Chinese government’s push to lower data charges also led to the poor results, said the company.
- China has stepped up the development of 5G networks and has received a commercial 5G license in June, along with fellow state-owned carriers, China Unicom and China Telecom.
Details: Net profit for the six months ended June 30 was RMB 56 billion ($8 billion), compared with RMB 65.6 billion in the same period last year.
- Revenue for the first half fell 0.6% to RMB 389.4 billion.
- Subscribers increased nearly 10 million in the first half, while revenue from telecom services fell 1.3%.
- The company aims to build over 50,000 5G base stations in China and provide next-gen commercial connectivity in over 50 cities before the end of the year, according to the statement.