How Has China Mobile Fared Thus Far In 2016?

China Mobile (NYSE:CHL), China’s largest mobile operator and fastest growing broadband provider, recently published its key performance indicators for the first three quarters of 2016. While the carrier’s revenues and profits increased in RMB terms, driven by a growing wireless subscriber base and expansion of the wireline broadband operations, margins have come under pressure on account of higher network expenses, due to higher tower leasing costs post the transfer of its tower assets to the China Tower JV last year.

The pace of the carrier’s wireless subscriber net adds accelerated this year (up 7% year-over-year) driven by its 4G net adds. However, average revenue per subscriber remained under pressure (down about 2%) despite a growing 4G mix (up 27%) and soaring data consumption (up 131% per user) as the carrier slashed pricing for data services, while also promoting flat-rate packages for its voice services. ^[1]  The carrier’s fledgling wireline broadband business has also performed well, adding about  19 million users over the first nine months of 2016. In comparison, market leader China Telecom has added just 7.7 million customers over the same period.

Trefis has a $65 price estimate for China Mobile, which is about 15% ahead of the current market price.

See our complete analysis for China Mobile | China Unicom | China Telecom

Note: While the company reports its results in RMB, we have converted key financial metrics into USD for this article. Year-over-year growth figures may diverge from the company’s reported metrics, on account of the depreciation of the RMB vs. the USD.

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1. China Mobile Press Release [↩]