China Mobile first half profit falls 8.5 percent

Beijing • China Mobile Ltd., the world's biggest phone carrier by number of subscribers, said Thursday its first-half profit fell 8.5 percent as the company rolled out fourth-generation service.

China Mobile, one of China's three major state-owned phone carriers, earned $9.4 billion in the six months ending June 30. Operating revenue rose 7.1 percent to $54.1 billion.

Profit margins at China Mobile and its two major rivals, China Telecom Ltd. and China Unicom Ltd., have been squeezed since Beijing rearranged the industry in 2008 to encourage competition and innovation. Each carrier was assigned mobile and fixed-line assets.

China Mobile received the country's first license for 4G service in December and has spent heavily to build what it says is the world's biggest 4G network, with 410,000 base stations in 300 cities.

"The initial 4G development has been remarkable with 4G network capabilities being rapidly built up," the company said in a statement.

Revenue from wireless data rose by more than half from a year earlier, contributing 24.2 percent of telecommunications services revenue.

"Revenue derived from data traffic became a major driver of revenue growth," the company said.

Its total subscribers rose 6.8 percent over a year earlier to 790 million, including 14 million 4G users.