“China Mobile Ltd., the world’s largest phone company, posted its biggest decline in profit since 1999 on rising costs to build out high-speed networks and attract new users. Shares dropped,” Bloomberg News reports. “Net income fell 16 percent to 30.2 billion yuan ($4.9 billion) in the fourth quarter, according to figures derived from full-year results released by the Beijing-based company today. That missed the 33.4 billion-yuan average of three analyst estimates compiled by Bloomberg.”

“Chief Executive Officer Li Yue is counting on a rapid shift to fourth-generation networks and introduction of popular devices like Apple Inc.’s iPhone to stem declining market share and boost data sales. The push is raising costs for everything from new equipment to smartphone subsidies as instant messaging apps like Tencent Holdings Ltd.’s WeChat cut sales from voice and texts,” Bloomberg reports. “China Mobile, which has 775.6 million subscribers, is the last of the nation’s three state-owned carriers to report results for the period. China Telecom Corp., the third-largest, yesterday reported fourth-quarter profit rose 18 percent to 2.8 billion yuan. Second-ranked China Unicom (Hong Kong) Ltd. on Feb. 27 reported net income rose 24 percent to 2.03 billion yuan. Both the smaller carriers offered the iPhone before China Mobile. That helped them lure users and cut the largest operator’s share of the nation’s 1.24 billion wireless accounts to 62 percent at the end of February, from 72 percent in October 2009.”

“To stem the decline, China Mobile began building out a faster network last year. The carrier reached agreement with Apple to offer the iPhone in December after six years of negotiations and sales of the device at China Mobile outlets started Jan. 17. Subsidies for all phones will rise 29 percent to 34 billion yuan this year with introduction of the iPhone being part of the reason, CFO Xue said.,” Bloomberg reports. “‘This is our first year with the iPhone so we are increasing the level of spending on subsidies,’ Xue said. ‘This will establish a good foundation for our long-term development.'”

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