* China Mobile Q3 net up 1.3 pct, better than estimates
* Heavy handset subsidies pressure bottomline - analysts
* Market still awaiting deal with Apple on iPhone - analysts
HONG KONG, Oct 22 China Mobile Ltd,
the world's biggest mobile operator by subscribers, posted a 1.3
percent gain in third-quarter net profit, beating estimates
slightly, after luring new users to its network with cheap
handsets and cutting phone call rates.
China Mobile, which has more than two times as many
subscribers as the population of the United States, earned 31.1
billion yuan ($4.9 billion) in July-to-September, according to
calculations by Reuters based on nine-month profit data released
That compares with an average forecast of 30.5 billion yuan
in a Reuters poll of nine analysts and a net profit of 30.7
billion yuan a year earlier.
China Mobile, by offering handset deals and ultra-cheap
voice plans, has built up a vast rural subscriber base. But
hefty handset subsidies and a lack of premium customers on its
3G data network, which does not support older models of Apple
Inc's iPhones, have kept its net profit growth in the
single digits in the past three years.
Earlier this year, China Mobile increased its full-year
handset subsidies to 26 billion yuan from the originally planned
20 billion yuan, helping to expand its subscriber base to almost
700 million. But the higher subsidies have in turn weighed on
its average revenue per user (ARPU).
"The increased subsidy expenses will hammer the company's
EBITDA margin while its effect of lifting 3G revenue and ARPU
may still need time to materialise," UOB Kay Hian said in a
report before the release of the earnings report.
China Mobile spent the equivalent of 4.5 percent of its
first-half revenues on handset subsidies in the first six
months, company data showed.
That is less than the 8.3 percent for China Telecom Corp Ltd
, which started selling iPhones earlier this year in
the hopes of securing more data subscribers.
China Unicom (Hong Kong) Ltd , which
started marketing iPhones three years ago, spent the least as a
percent of its revenues, at around 2.9 percent.
Shares in China Mobile have has risen more than 12.6 percent
this year, better than China Telecom's 10.7 percent gain and
China Unicom's 16.3 percent drop.
China Mobile shares ended 1.1 percent higher, before the
earnings announcement. They beat the main Hang Seng Index's
0.7 percent gain.
The company had a net profit of 93.31 billion yuan in the
first nine months compared with 91.98 billion yuan a year
earlier, the company said after the Hong Kong market close.