August 10, 2017 / 4:56 AM / in 2 years

UPDATE 2-China Mobile's H1 profit climbs, shares jump after special dividend

* Net profit rises 3.5 pct to 62.7 billion yuan

* Sets special dividend of HK$3.20 per share

* Shares of firm jump as much as 5.8 pct after dividend (Recasts, adds share price)

HONG KONG, Aug 10 (Reuters) - China Mobile, the world’s biggest mobile phone operator by subscribers, cheered investors on Thursday with a special dividend and posted a 3.5 percent rise in first-half net profit, sending its shares up as much as 5.8 percent.

China’s top telecommunications operator announced a special dividend of HK$3.20 ($0.4094) per share to celebrate the 20th anniversary of its Hong Kong listing. It also announced an interim dividend of HK$1.623 per share.

Fuelled by growth in 4G subscribers, China Mobile reported a profit of 62.7 billion yuan ($9.42 billion) for the six months to June, up from 60.6 billion yuan a year ago. Operating revenue rose 5 percent to 388.9 billion yuan.

China Mobile, together with smaller rivals China Unicom and China Telecom, is benefitting from mobile users upgrading to 4G and from demand for mobile data, even though carriers face government calls to hold costs down for consumers.

China Mobile’s 4G mobile network subscribers rose to 594 million after the addition of 58.62 million customers in the first half. It said it was on track to achieve its target of a net increase of 100 million 4G users this year.

The company, which has 867 million mobile customers, had said in March that a government call for telecom operators to lower prices was likely to reduce its 2017 operating profits and revenues by around 7 billion yuan.

China Mobile also said on Thursday it would start field tests for 5G this year.

“This year, we will commence field tests for 5G and steadily drive the business forward taking into account the maturity of the 5G standard and the related business model,” the company said in a statement.

China Mobile is also making big investments into the so-called Internet of Things initiative, as the Chinese government pushes for the strategy that will see more devices and people become interconnected.

Shares of the company jumped as much as 5.8 percent after the earnings and dividends were announced and closed up nearly 3 percent, beating a 1 percent drop at the benchmark Hang Seng Index. ($1 = 7.8158 Hong Kong dollars) ($1 = 6.6527 Chinese yuan renminbi) (Reporting By Donny Kwok and Sijia Jiang; Editing by Anne Marie Roantree and Muralikumar Anantharaman)

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