China Mobile does not increase production

Absrtact: [China Unicom 5.32 billion yuan in the first half of the profit compared to the first half of the profit than the former 10 times times, but the difference between the two profit growth is huge, Unicom reached 55%, China Mobile only 1.5%] China Mobile is still in a relatively slow growth period. Yesterday

[China Unicom 5.32 billion yuan in the first half of the profit compared to the first half of the profit than the former 10 times times, but the difference between the two profit growth is huge, Unicom reached 55%, China Mobile only 1.5%]

China Mobile is still in a relatively slow growth period. Yesterday, China Mobile announced the first half of the 2013 year results show that China Mobile business income of 303.1 billion yuan, an increase of 10.4%, shareholders should account for 63.1 billion yuan, the increase of 1.5%.

In the opinion of telecom analyst Liang, China Mobile's first half of the report card can only be said to be "difficult to ensure the growth of profits", as the market saturation is increasing, the operators of homogeneous competition, and the internet business to the traditional business of the replacement of the increasingly obvious, China's mobile market position is facing a small challenge.

Despite the recent earnings announcement, there are rumours that Apple will be moving with China, and that it will issue a 4G licence this year to bring some positive but Apple's decline in sales in China has been an indisputable fact compared with the scramble for Apple a few years ago, and the commercialization of 4G will emerge only a year after the licence was issued.

China Mobile also said in its earnings report that the downward pressure on development is further increased. The company in the context of the overall promotion of strategic transformation, resource allocation needs will be increased, medium and short term profit pressure will increase correspondingly.

Profit growth far below Unicom

Compared with China Unicom's 5.32 billion yuan profit in the first half of the first half of the profit than the former 10 times times, but the profit growth of the two difference is huge, unicom reached 55%, China Mobile only 1.5%.

However, the advantage of user size is still promoting the growth of China Mobile's business. By the end of June 2013, China moved more than 740 million users, the total number of minutes to reach 2.1376 trillion minutes, wireless internet traffic growth of 129% year-on-year.

In terms of revenue, communications services earned 284.7 billion yuan, up 6.8% from a year earlier. Voice business revenue of 175.1 billion yuan, a slight decrease from 177.1 billion a year earlier; Data business revenue reached 95.4 billion yuan, up 25.5% from a year earlier, and increased to 33.5% per cent of the revenue from communications services.

Terminal sales, the first half of the group sales of TD-SCDMA mobile phone about 66 million. At the same time, group customer business has also maintained growth, the group has more than 1 million lines, group customer communications and information revenue growth of more than 30%.

The biggest bright spot is the wireless Internet service, the income reaches 47.4 billion yuan, the year-on-year growth 62.2%. But it only accounts for 16% of the revenue, and is at the expense of a 129% increase in traffic.

For China Mobile's slow earnings growth, Liang that this means that the "demographic dividend" model that has grown over the years by popular users has continued to weaken, followed by competitors China Unicom and 3G China Telecom, which gradually digested the early side effects of 3G subsidies, The increase in the attractiveness of high-end users led China Mobile to increase promotional and terminal subsidies, and the industry's concern about the impact of OTT services such as micro-credit has exacerbated the situation.

In addition, the transfer network, virtual operation and the entry of private capital are making the competition situation more serious.

4G cake is not easy to eat

China Mobile's 2013 interim results also disclosed the latest development results of "four-net Synergy": Strict control of 2G network investment, continuous upgrading of 3G (TD-SCDMA) network quality, base station reached 361,000, WLAN access point reached 4.1 million.

On the general concern of the 4G (LTE), China Mobile has launched more than 200,000 base stations nationwide, 100 key cities will achieve continuous coverage of the main urban areas, commercial preparation is progressing well.

Prior to that, the Ministry has made clear the issue of 4G licences in the year, plus China Mobile to expand the scale of LTE test, so that it has a certain advantage in the 4G era. At the same time, LTE terminal development is also rapidly advancing, China Mobile plans to purchase 1 million LTE terminals this year.

And China Mobile's progress in 4G has sparked speculation about a deal with Apple. Xi, China Mobile's chairman, said after a semi-annual earnings announcement that China Mobile's current talks with Apple were progressing very smoothly and hinted that the two sides were expected to work together in the future.

Previously, Apple had not reached an agreement with China Mobile, because once the deal was reached, Apple needed to redesign the iphone's internal structure to move (54.24, -0.35, -0.64%) TD-SCDMA; and the reluctance to undertake the huge cost of marketing, And a hefty sales subsidy for the expensive iphone. For now, the upcoming 4G licences are expected to be based on the LTE standard rather than the Fdd-lte standard, meaning the new iphone's Qualcomm (66.95,-0.01,-0.01%) chips will support both formats, if China Mobile introduced the iphone, The latter design does not require significant changes.

It is speculated that if Apple can provide a midrange Apple smartphone, China Mobile may be able to attract more high flow users, thereby increasing its net profit level.

But in the face of the challenges of its own business, Apple may not be able to "timely help" for China Mobile. In the Flying Elephant Net CEO Xiang View, Apple chose to work with China Mobile because it has faded, with nearly 800 million users in China Mobile, the equivalent of a European, significant for Apple, and the second is that cheap mobile phones must flush the market for large users, which is the basis for cooperation, but he expects the market will not be very good, Mobile users already have a lot of apples.

VL Asset Management Ltd, general manager Vincent Ram (Vincent Lam), also believes that the iphone's current popularity in China may be less than some of the Android phone, even if China Mobile and Apple to achieve sales cooperation, There is no guarantee that this cooperation will have much impact on revenue.

and good-looking 4G cakes may not be delicious. The arrival of 4G, China Mobile still need to face how to avoid pipeline, and find a new way of diversification as a breakthrough. In the context of the basic communications Service is not enough to support the growth of performance, Liang predicted that in the future for a considerable period of time, China Mobile will not increase the situation is difficult to change.