|Staff Reporter |||Apr 21, 2020 06:50 PM EDT|
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China Mobile significantly improved its user base, adding next-generation subs after it announced flat earnings for the first quarter of the year. Handset sales and ARPU of the company continue to drop because of the pandemic to the Chinese economy.
The world's largest handset operator China Mobile acquired a profit of 23.5 billion yuan with a loss of 0.8 percent on an annual basis for the first quarter of 2020. Its operating revenue also fell by two percent at 181.3 billion. The service revenue, however, improved by 1.8 percent at 168.9 billion yuan. On the other hand, its product sales fell by 34.9 percent at 12.4 billion yuan.
According to China Mobile chairman Yang Jie, the pandemic adversely affected China's economy during the first quarter that its business also suffered losses due to the decreased economic activity. He added that the company continues to ensure reliable communications, enhance prevention and control measures, and maintain the quality of its service.
China Mobile also promised to transform its business according to the latest trends and impose necessary upgrades to increase the demand for its information services.
Last month, China Mobile was subject to local business restrictions where the operator more than doubled its subscribers in March to 31.7 million. The total sub base decreased by four million during the first three months of 2020, with only 946 million subscribers. However, new 4.1 million users were added repelling the 8.1 million loss of subscribers during January and February.
The ARPU also fell by 6.8 percent on an annual basis and is now at 46.90 yuan per share, but China Mobile noted that the loss was from 2019 fallbacks. Furthermore, the company noted that its performance would improve for the rest of 2020 as China reverts back to normal business activities that would possibly increase the company's costomer base in the coming months.
Furthermore, the company's total voice usage also decreased by 16.3 percent on an annual basis. China Mobile then attributed to an OTT substitution to remedy the adverse effects of the pandemic on the business. SMS usage then increased by 45.4 percent caused by increased volumes of corporate messaging in China. Finally, the average monthly data usage for China Mobile also increased by 46 percent at 8.3 GB per user.
Yang then added that despite the challenges that China Mobile faces at present, the business transformation strategy would allow the company to recover faster from its expenses, particularly the higher 5G-related costs. Furthermore, the company also promised to develop new sources of revenue and, at the same time, reduce the costs of its operations and enhance efficiency.
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