China Mobile adds 64M 4G users, but forecasts slower growth

China Mobile, the world’s largest mobile operator, continued to add 4G users at a brisk rate and saw ARPU jump in Q1, but said pressure to cut tariffs will create challenges for its growth rate this year.

The operator boosted its 4G user base by 64 million in Q1, taking its total to 377 million and accounting for about 30 per cent of the global total. According to GSMA Intelligence, global LTE connections reached nearly 1.1 billion at the end of 2015 and were estimated at 1.22 billion at the end of Q1.

The majority of the operator’s 4G additions came from its 3G user base, which fell to 153 million (a year ago it had 234 million). It added 7.6 million total mobile connections during the quarter, giving it 834 million users for a 63 per cent market share.

While revenue for the period rose 8.7 per cent year-on-year to CNY177.5 billion ($27.4 billion), its net profit edged up just 0.5 per cent to CNY23.9 billion. EBITDA was up 7 per cent to CNY65.1 billion; its EBITDA margin declined by 0.6 points to 36.7 per cent.

Service revenue rose 4.9 per cent to CNY151.6 billion.

The company said in a statement that “taking into consideration the factors of high pressure on tariff reduction and the carryover effect of terminal sales last year, the group’s revenue growth rate for the whole year faces challenge”.

ARPU increased nearly 20 per cent to CNY57.60 ($8.89) from the previous quarter. Mobile data traffic soared 148 per cent year-on-year, with average monthly data usage per user rising 24 per cent to 551MB in Q1.

Total SMS usage fell 2.4 per cent quarter-on-quarter and was down 10.6 per cent year-on-year. Average minutes of use per user per month dropped 2.6 per cent to 409.