News
Chinese telco posts solid revenue growth driven by end of VAT change impact, promotional activity, 4G sales.
China Mobile on Wednesday reported strong growth in its 4G customer base in the first quarter of 2016 and noted that changes to the tax regime is no longer affecting revenue growth.
The country’s – and the world’s – largest mobile operator had a total mobile customer base of 833.85 million at the end of March, an increase of 7.61 million during the quarter and 18.47 million on the same date a year earlier.
It added 64.23 million 4G customers during the first quarter, taking its 4G base to 377 million. The telco also added 5.56 million fixed broadband customers to take its total to 60.59 million.
China Mobile said it "vigorously promoted" 4G terminal sales during the quarter to accelerate uptake, driving overall revenue growth.
Operating revenues grew by 8.7% year-on-year to 177.5 billion yuan (€24 billion), including CNY151.6 billion in service revenues, an increase of 4.9%.
China Mobile said its revenue growth rate picked up compared with full-year 2015 for a number of reasons, in addition to strong 4G sales; its revenue growth is no longer impacted by the move to value-added tax from business tax, while tariff promotions and sales incentives stimulated customer spending during the quarter.
However, the operator is cautious on its prospects for full-year 2016.
"Taking into consideration the factors of high pressure in tariff reduction and the carryover effect of terminal sales at the end of last year, the group’s revenue growth rate for the whole year faces challenge[s]," it said.
China Mobile posted solid earnings growth in Q1, with EBITDA increasing by 7% to CNY65.1 billion. Its bottom line increased by just 0.5% to CNY23.9 billion though.
