China Mobile reports 9.5% increase in sales; depreciation and electricity expenses will increase at relatively high rates

China Mobile is the world’s largest wireless network operator by customers, serving 940 million total subscribers in the Q1 2021.    The #1 China carrier had 189 million 5G customers a March, an increase of 24 million since December.  Its 4G-LTE use base also grew during Q1 2021, up 36 million year-on-year to 788 million.

China Mobile reported a 9.5% year-on-year increase in sales, to 198.4 billion Chinese yuan ($30.6 billion), for its first quarter of 2021. China Mobile’s net profit increased by 2.3% to about RMB24.1 billion ($3.7 billion).

The company states that continued to devote concerted efforts to promoting digitalized and intelligent transformation and achieving high-quality development. Placing a special focus on its “4×3” strategic core and fully implementing the “5G+” plan, it managed to maintain stable growth in key business performance indicators and delivered sound development momentum, taking solid steps towards becoming a world-class enterprise by building a dynamic “Powerhouse.”

China Mobile Chairman Yang Jie said following its large-scale 5G network deployment, it expects corresponding depreciation and electricity expenses to increase at relatively high rates.

Following the large scale operation of 5G, the China Mobile Group expects the corresponding depreciation and electricity expenses will increase at relatively high rates. As the Group scales up the development of DICT and other information services, the demand for resources to address the need for business transformation and upgrade will remain robust.

Facing these challenges and pressure, the Group will continue to explore new sources to increase revenue, and at the same time take measures to lower costs and enhance efficiency. It will also precisely allocate resources by adhering to the principle of ensuring a sufficient budget for areas essential to promote growth, while reducing and controlling expenses on certain selected areas.

While fostering business transformation, promoting innovation and nurturing new areas of growth, the Group will strive to achieve stable and healthy growth in telecommunications services revenue and net profit, maintain good profitability and continuously create value for investors.

China Mobile said it was under pressure to make other cutbacks to cope with the increase in electricity fees and depreciation charges in 2020.

China Mobile’s The revenue growth was mainly due to a 67 per cent increase in handset sales to CNY20.8 billion, which the operator credited to a wider range of 5G models at more affordable prices. Telecoms service turnover increased 5.2 per cent to CNY177.7 billion.

Total subscribers fell by 6 million to 940 million. ARPU edged up 1.1 per cent to CNY47.40, while average monthly data usage increased 34.9 per cent to 11.2GB.  The volume of total voice minutes increased 8.3 per cent and SMS usage dropped 12.6 per cent.

China Mobile also faces a huge capital expenditure bill this year as it extends 5G services outside the big cities and into less densely populated communities.  It plans to spend RMB183.6 billion ($28.3 billion) in total, up from RMB180.6 billion ($27.8 billion) last year. In its last annual report, it said that approximately RMB110 billion ($17 billion) would go toward 5G rollouts.



China Mobile revenue climbs on 5G handset growth


One thought on “China Mobile reports 9.5% increase in sales; depreciation and electricity expenses will increase at relatively high rates

  1. China seems to have decided not to even bother inviting foreign companies to bid on telecoms work anymore.

    It’s hard to draw any other conclusion from the news that China Mobile only invited Huawei and ZTE to bid on the contract for its converged 4G/5G core, according to reports from Light Reading and Gizmochina. China Mobile itself doesn’t seem to have published anything and both stories seem to rely on a Chinese language report, so details may be lost in translation, such as the total sums involved.

    But there seems to be unanimity on the matter of who was and wasn’t invited to bid. In fact, even the term ‘bid’ is obsolete these days as the Chinese state is clearly micromanaging the whole process and the façade of a competitive tender has been crumbling for some time. But such is the way of government interference in the market that they still feel compelled to pretend it isn’t taking place, however flagrant.

    So, as ever, Huawei got most of the work and ZTE was brought in to turn a monopoly into a duopoly. The absence of any meaningful competition means the CCP will also need to keep a close eye on the subsequent work, as those involved have no commercial pressure to do a good job. On the other hand, Huawei and ZTE have a lot to be thankful for after US attempts to destroy them, so they’re be crazy not to put their best foot forward.

    For Ericsson and Nokia this marks the culmination of what both of them seem to have been resigned to for some time. Another recent LR report revealed that Ericsson is already in the process of cutting hundreds of jobs in acknowledgment of its greatly diminished prospects in China. Nokia’s hopes, meanwhile, seem to rest on the Chinese state occasionally wanting to create the illusion of genuine global competition within its telecoms sector.

    In a way this simplifies the whole situation: China is banning western vendors and the west is banning Chinese vendors. It’s a shame, but at least everyone knows where they stand. Stuck in the middle are multinational operator groups such as Orange, which revealed at a strategy presentation today that its Huawei policy continues to be guided by the specific rules of each country it operate in. Right now it’s hard to see any way back from the continued Balkanisation of the telecoms sector.

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