China Mobile: of 750 Million Users, Most Still on 2G phones

Beijing, May 28, 2014 / CEI / -. “Currently, China Mobile, which owns 780 million users, the majority are still using 2G phones,” China Mobile chairman Xi Guohua said at the shareholders meeting, the need to push customers to upgrade 3G and 4G, last year the company data flow and therefore the amount of explosive revenue growth. China Mobile CEO Li Yue introduced by Tencent micro-channel business impact, short message service first four months of the company fell more than 20%.

Beijing, May 28, 2014 / CEI / -. “Currently, China Mobile, which owns 780 million users, the majority are still using 2G phones,” China Mobile chairman Xi Guohua said at the shareholders meeting, the need to push customers to upgrade 3G and 4G, last year the company data flow and therefore the amount of explosive revenue growth. China Mobile CEO Li Yue introduced by Tencent micro-channel business impact, short message service first four months of the company fell more than 20%. Shareholders’ meeting, China Mobile executives have responded to the business development of 4G, 5G R & D progress, and funded three major telecom operators in building the tower companies and other investors are concerned about the topic. China Mobile executive director Liu Aili, at present the parties are negotiating on the Eiffel Tower and the details of the company’s operations, the new company may be set up in the form of hybrid capital, do not rule out the introduction of private capital.

Liu Aili said China Mobile shareholders and investors tend to play a role. He estimates that after the establishment of the company will first inject Tower 2G, 3G, 4G tower facility assets, and priority will be injected into the new facility, the next step was injected into other existing facilities. Upon completion of the injection, the three major telecom providers will lease tower company facilities.

Xi Guohua said China Mobile profit model is transformed from voice communications to data traffic, is still in transition. Last year, the company data traffic increasing by 24%, accounting for corporate communications to increase the percentage of total revenue to 35%; Instead, voice revenues have peaked.

At the meeting, shareholders criticized the company has a small investment is too large, affecting dividend and profit performance. Xi Guohua response to last year’s capital expenditures and higher marketing costs, mainly because the company hopes built 4G network in the shortest possible time, to complete the construction within one year 500,000 base target. He stressed that if you do not increase capital expenditures and marketing in order to promote the development of 4G services, then in the next two years, although you can continue to maintain growth, but after two years of 4G services on the “dead.” Xi Guohua said that China will intensify the development of 4G mobile services, although the terminal technology has matured, but industrialization, including price, variety and other factors still need time to develop, he expected growth in 4G services will be issued in the second half of this year will really force.

Xi Guohua said that at present a number of external factors that will affect the company’s profit performance, such as VAT, business tax reform, capital expenditures and increased costs. But he believes that this is just normal fluctuations in transition.

Xi Guohua also revealed that the tower is expected to be established in the company in the third quarter of this year. By then, the three major telecom providers can share resources, which will help reduce operators’ capital expenditures and to avoid duplication of base stations and other problems arise.

Li Yue is talking about, by the micro-channel influence, China Mobile SMS business dropped 15 percent last year, the first four months of this year fell by more than 20%, is expected to continue the company’s micro-channel messaging services a big impact. Li Yue revealed that China Mobile has been involved in research 5G, but is still in the concept stage, is expected in the next five to 10 years, the domestic telecommunications market dominated by 4G.

Adjusted for the effect of the three carriers for interconnection standards brought inland, Vice President and Chief Financial Officer of China Mobile, said Xue Taohai, this adjustment will affect the company’s profits this year. Reported revenue of China Mobile in the first quarter by 1.4% thus reducing profits have also been significantly affected.

For mainland will start the second half of the camp changed to increase the tax reform, Xue Taohai think this company’s profits also have a negative impact, but he stressed that the company’s revenue for the gradual transition from the voice traffic revenue, which made gradually increase the proportion of low-tax business, China Mobile will henceforth be exempted from VAT tend to choose companies to reduce costs. He expected, as the industry gradually expand the scope of tax reform, the company is exempt from the tax increase, the business impact of changes to the company’s growth will be gradually reduced.