China Mobile saw net profits inch up only slightly in 2012, with financial growth stymied by increased expenses. The carrier did maintain its position as the world’s largest wireless operator, ending the year with 710 million total customers.
Operating revenues increased 6.1% year-over-year to $90.1 billion in 2012, bolstered by its growing customer base and increased usage of both data and voice services. China Mobile said it added 97.5 million new customers in 2012, including 36.7 million to its TD-SCDMA-based 3G network. Voice usage increased 7.8% across its network, while data service surged 187.6% year-over-year and accounted for 12.2% of total revenues at the end of 2012.
An increase in expenses tamped down profits, which increased just 2.7% year-over-year to $20.8 billion in 2012, with profit margins actually dipping .7 percentage points to 23.1% for the year.
China Mobile a number of challenges it’s facing moving forward, including increased competition from rivals, slowing growth in traditional communication markets and the changing needs of enterprise customers. The carrier is looking to take advantage of its relatively modest mobile data penetration with the rollout of more advanced devices compatible with its home-grown 3G technology and moving forward with plans for LTE services. China Mobile noted that at the end of 2012, just over 12% of its customer base were on its 3G network, while just half of those customers were using smartphones.
China Mobile is currently the only one of the three large Chinese operators not offering Apple’s iPhone device. The carrier is looking to add that device sometime this year to run across its TD-SCDMA network. A report last year indicated that China Mobile’s network was supporting more than 15 million iPhones despite not officially offering the device.
As for expanding its LTE services, China Mobile said it plans to build more than 200,000 base stations this year, with capital expenditures across its operations growing from approximately $20 billion in 2012 to more than $30 billion this year. China Mobile’s current network is supported by 800,000 GSM base stations running at 71% of capacity; 280,000 TD-SCDMA base stations running at 24% of capacity; and more than 3.8 million Wi-Fi access points that handled more than half of the carrier’s mobile data traffic in 2012.
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