China Mobile to increase handset subsidies 26 pct in 2014

HONG KONG, March 20 Thu Mar 20, 2014 4:44am EDT

HONG KONG, March 20 (Reuters) - China Mobile Ltd will increase handset subsidies by 26 percent to 34 billion yuan ($5.49 billion) in 2014, said Chief Financial Officer Xue Taohai, as it aims to keep smartphone contract prices low in the face of competition from rivals.

Last year China Mobile, the world's largest mobile carrier by subscribers, spent 27 billion yuan on handset subsidies.

The company's capital expenditure, which will increase 22 percent to 225.2 billion yuan, will peak in 2014 and 2015 and begin to decline in 2016, Xue said at a press briefing following China Mobile's 2013 earnings announcement on Thursday.

The amount China Mobile spends on marketing in 2014 will remain at the same level as last year, Xue added.

($1 = 6.1965 Chinese Yuan)

(Reporting by Yimou Lee in HONG KONG; Writing by Paul Carsten in BEIJING; Editing by Matt Driskill)

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