Thu, March 15, 2012
Technology > Technology

China Mobile Q4 growth mild; hopes pinned on iPhone tie-up

2012-03-15 07:52:08 GMT2012-03-15 15:52:08(Beijing Time)  SINA.com

A China Mobile logo is pictured at the ITU Telecom World in Geneva October 24, 2011. REUTERS/Denis Balibouse

China Mobile, the world's biggest wireless carrier by number of subscribers, met expectations by posting a 4.6 percent rise in fourth-quarter net profit on Thursday as higher mobile data usage offset some of the impact of hefty handset subsidies.

The carrier, which has a market value of about $218 billion and competes with smaller rivals China Unicom and China Telecom Corp, could see growth accelerate later this year if it succeeds in sealing a deal with Apple Inc to offer the iPhone.

China Mobile has been trying to boost the average rates users pay in the world's largest mobile phone market, where barely 15 percent of the 988 million subscribers - and soon to hit 1 billion - are 3G users.

But its adoption of a homegrown mobile phone technology, the TD-SCDMA standard, viewed by analysts as inferior to the internationally accepted technologies used by its main competitors, is a stumbling block in its efforts to secure the Apple tie-up and attract higher-end phone users.

China Mobile, which was born out of several rounds of government restructuring of the domestic telecoms industry, is now running trials on a superior 4G technology - TD-LTE - which it expects to use on a wider scale next year.

The launch of the new technology could succeed in breaking the deadlock with Apple over the iPhone, analysts said, though they differed on when the tie-up would actually happen.

The iPhone hopes partly led to a flurry of upgrades to China Mobile's stock ratings by brokerages, including Credit Suisse, HSBC and Goldman Sachs, over the past week, and helped push its shares up 8 percent over two days to 2-1/2-year highs.

The shares have since given up all of the gains and were trading down 0.53 percent by midday on Thursday.

Some analysts were not sure how soon the new technology would be launched.

"I don't expect (nationwide) commercial LTE to be launched very soon," said Kelvin Ho, an analyst with Yuanta Securities.

"The Chinese government will have to evaluate whether China needs LTE so quickly. That is from the demand side. They will also have to look at the supply side, i.e. the technology maturity and availability of handsets," Ho added.

(Agencies)

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