China Mobile Subscribers to Near 300M by End of ’06

The world’s largest mobile phone network operator could see its subscribers near 300 million by the end of this year if it maintains its current pace of growth, the company said Thursday in results for the first half of 2006.

China Mobile, which changed its name from China Mobile (Hong Kong), said it is adding 4.29 million new subscribers per month on average so far this year. The company boasted 278.3 million users at the end of July, and if it maintains its current growth rate in the last five months of this year, it will reach 299.7 million, while one or two strong months would push it over the 300 million level.

The company’s subscriptions already top all wireless users in the United States, which stand at an estimated 217.9 million, according to the Cellular Telecommunications and Internet Association (CTIA), an industry organization. It also handily beats the 111.2 million mobile phone subscribers counted by the Telecom Regulatory Authority of India at the end of July.

To increase growth, China Mobile is concentrating on rural areas of the country, following the lead of government policies meant to bring further development to central and western areas of China that have been bypassed by much of the economic development of the past few decades. A lot of the country’s growth up to now has been concentrated in southern and coastal regions of the nation.

The user penetration rate in such areas is about 11.5 percent, but China Mobile hopes to improve that figure by further building out its network and offering more low-cost handsets. Currently, the company offers eight low-cost handset models, the lowest priced at 300 renminbi (US$37.65), China Mobile said.

The company also intends to promote more customized handsets, in part to further lower costs that act as a barrier to gaining new subscribers. Customized handsets accounted for only 10 percent of its market in the first half of this year.

For its mainstream subscribers, China Mobile intends to promote mobile music by establishing a wireless music club, in addition to offering push mail, mobile search and location-based services.

The company’s revenue in the first six months of 2006 rose 20 percent to 136.98 billion renminbi, while its net profit increased 26 percent to 30.2 billion renminbi.

Its capital spending reached 31.9 billion renminbi as of June 30, less than half of the 83.3 billion renminbi it has budgeted for this year. The company said it will continue to carry out planning for the construction and operation of a third-generation (3G) network, but gave no hint of when it will start operations. China has not yet awarded 3G licenses to mobile phone companies.

-Dan Nystedt, IDG News Service (Taipei Bureau)

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