HONG KONG (Reuters) - China Mobile Ltd, the country’s largest wireless carrier, said on Wednesday its net profit for the first three months of 2016 edged up by just 0.5 percent, as popular messaging apps continue to eat into revenues at network providers.
In a securities filing, Beijing-based China Mobile said net profit during its first quarter was 23.9 billion yuan ($3.7 bln), while operating revenues climbed 8.7 percent from a year earlier to 177.5 billion yuan.
Like smaller peers China Unicom Hong Kong Ltd and China Telecom, the company competes in communications with free messaging apps like Tencent Holdings Ltd’s WeChat, which continued to cut into revenue from traditional text and phone calls, a major source of income for carriers in the world’s largest smartphone market.
Average revenue per user (ARPU) of its mobile business, a key industry bellwether of performance, was 57.6 yuan in the first quarter.
China Mobile increased its number of customers to 834 million people in the first three months of the year - more than twice the population of the United States.
About 377 million of its customers were on more lucrative fourth-generation (4G) contracts as these customers spend more on faster-service plans than other users.
China Mobile shares fell 1 percent prior to the results, in line with a 0.9 percent fall in Hong Kong’s broader Hang Seng index.
($1 = 6.4664 Chinese yuan renminbi)
Reporting By Yimou Lee; Editing by Susan Fenton