(Adds earnings figures, data, industry context)
* Q1 net profit 25.24 bln yuan, third consecutive decline
* Revenue rises 7.8 pct to 154.83 bln yuan
* Shares close down 0.1 pct, in line with benchmark
By Paul Carsten
BEIJING, April 22 China Mobile Ltd
booked its lowest quarterly profit in five years as the world's
biggest mobile carrier by subscribers struggled to compete with
mobile Internet applications offering services such as
China Mobile's traditional revenue sources such as phone
calls and short messaging services (SMS) have rapidly lost out
to apps such as Tencent Holdings Ltd's popular WeChat,
which allows smartphone users to communicate over data networks.
To capitalise on increased data demand - and recover
higher-spending customers from rivals China Unicom Hong Kong Ltd
and China Telecom Corp Ltd - China Mobile
has been investing heavily in fourth-generation mobile networks.
The company complimented 4G's faster connection speeds in
the first quarter by starting sales of Apple Inc's
popular iPhone, to stem the flow of defectors turned off by
China's Mobile's slower 3G network and lack of iPhone.
But the push towards data-fuelled mobile communications was
not enough to offset the revenue squeezed by apps like WeChat,
as net profit fell 9.5 percent to 25.24 billion yuan ($4.05
billion) - China Mobile's third straight quarterly profit drop.
Operating revenue rose 7.8 percent to 154.83 billion yuan.
China Mobile "experienced severe challenges in its
operations and development as the impact of mobile Internet on
the traditional communications business became more evident,"
said Chairman Xi Guohua in an earnings statement on Tuesday.
Shares of China Mobile have fallen 11 percent since the
start of the year, compared with a 2.5 percent fall in the Hang
Seng Index. Ahead of the results, they closed 0.1 percent
lower, in line with the benchmark.
Growth could be on the horizon, according to analysts, after
China Mobile added 5.47 million subscribers in March, the most
in seven months. Its total of 781.1 million subscribers made up
more than 60 percent of the country's 1.25 billion.
"We believe many high value customers (many of which have
SIMs with both Unicom and Mobile; or with Telecom and Mobile)
will switch back to a single primary relationship with China
Mobile, shifting growth momentum back to China Mobile," wrote
Chris Lane, a Hong Kong-based analyst with Sanford C. Bernstein,
in an April 11 research note.
The main attraction for the returning customers would be
China Mobile's "extensive" 4G rollout, Lane said.
($1 = 6.2274 Chinese Yuan)
(Editing by Christopher Cushing)