China Mobile Q4 profit up 4.6%

China Mobile, the world’s biggest wireless carrier by number of subscribers, met expectations by posting a 4.6 per cent 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 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 per cent 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 per cent 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 per cent 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. China Mobile, which boasts 655 million users -more than double the US population -made a net profit of 33.9 billion yuan ($5.4 billion) for October-December, based on Reuters calculations using full-year company data, compared with a 33.2 billion yuan market estimated by analysts. Full-year net profit was 125.87 billion yuan against 119.64 billion yuan in the previous year and compared with a consensus of 125.2 billion yuan from a Thomson Reuters poll of 30 analysts. China’s carriers have been suffering from falling average rate per user (ARPU) as they subsidise handsets from phone makers such as Samsung Electronics, HTC Corp and ZTE Corp to attract high-end users.  China Mobile was expected to post sales of 140.4 billion yuan, according to the median of eight analyst estimates. The company said its dividend payout ratio for 2012 will be 43 per cent, unchanged from last year, when the full-year payout was HK$3.327 a share. China Mobile listed 86.3 billion yuan in cash and cash equivalents on its balance sheet at the end of December. “The dividend payout will be a disappointment,” said Jim Tang, an analyst at Shenyin Wanguo Securities Co. in Shanghai. “Many people were looking for an increase. The growth rate is not great for profit, so the payout with cash is what the market expects.” The carrier is the only one of the nation’s three wireless companies not offering the iPhone, after No. 3 China Telecom added the device last week. China Mobile added Research In Motion Ltd. (RIM)’s BlackBerry Bold 9788 in September in a bid to win over higher-spending 3G users. “The poor TD-SCDMA network cannot satisfy demand for high-speed data transmission,” Tommy Mok, a Hong Kong-based analyst at RBS Asia Ltd., wrote in a March 12 note to clients. China Mobile “has taken a different route to capture mobile data usage growth in 2011, with faster expansion in Wi-Fi.”