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.

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References:

https://www.chinamobileltd.com/en/file/view.php?id=246145

https://www.lightreading.com/5g/china-mobile-warns-of-mounting-5g-costs/d/d-id/768941?

China Mobile revenue climbs on 5G handset growth

 

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