Business / Gadgets

Company says returns from 4G elusive so far

By Meng Jing (China Daily) Updated: 2014-04-30 07:35

Heavy investment in the fourth-generation network might not bring returns for China Mobile Ltd in the near future, analysts said. It was the only one of the nation's three telecom giants to see first-quarter profits decline.

China Mobile, the country's largest network carrier by subscribers, said first-quarter profit sank 9.4 percent year-on-year to 25.2 billion yuan ($4 billion).

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Rivals China Unicom Ltd and China Telecom Corp Ltd, the second- and third-largest mobile carriers by subscribers, saw profits jump 74 percent and 17.9 percent, respectively.

China Mobile, which won a 4G license in December, has taken the lead in launching the next-generation service in China. Its 4G customer base stood at 2.79 million as of the end of March, with total customers at 781 million.

But those new users aren't generating growth for China Mobile, at least not yet.

Heavy spending on 4G network infrastructure, combined with competition from the Internet - such as the mobile messaging app WeChat - apparently hurt first-quarter profits, analysts said.

Sandy Shen at consulting firm Gartner Inc said it's quite possible that China Mobile's profit will continue to decline for the rest of the year.

"The investment in 4G network infrastructure is expected to keep rising but returns from offering 4G network services is limited at the current stage," said Shen.

Still, China Mobile's drive into 4G services has put pressure on China Telecom Corp Ltd, the nation's smallest mobile network carrier by subscribers. The company on Monday reported a drop of 2.38 million in the number of its mobile subscribers in the first quarter.

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