China Mobile 2013 profit falls 5.9%

"Fiercer competition"

China is the world's biggest smartphone market with more than 500 million mobile Internet users. Tencent's hugely popular WeChat app, known as Weixin in China, now has 355 million monthly active users Tencent said on Wednesday.

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The mass adoption of smartphones has driven an increase in mobile data consumption, which has pushed China Mobile's average revenue per user (ARPU), a key industry measure of performance, down to 67 yuan in 2013 from as high as 71 yuan two years earlier.

"The exponential growth in mobile Internet...brought forward fiercer competition across the industry and an era driven by data traffic operation," China Mobile Chairman Xi Guohua said in the earnings statement on Thursday.

With its 4G service and the iPhone launch, the company is trying to win back customers after its low-quality 3G service saw an exodus to smaller competitors China Unicom Hong Kong Ltd and China Telecom Corp Ltd.

It has seen some success. China Mobile gained 375 million subscribers in February while China Unicom only added 157 million users and China Telecom just 22 million new customers.

China Mobile's 776 million users made up 62 percent of China's 1.25 billion subscribers in February, but only 28 percent of these are signed up to more lucrative 3G contracts, by far the lowest proportion of China's three carriers.

China Mobile shares closed down 3.6 percent on Thursday after the earnings were released, versus a 1.8 percent drop in the Hang Seng Index.

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