China Mobile 1H net profit up 6.3%

China Mobile Ltd. Thursday beat estimates to post a 6.3% increase in its first-half net profit, as it added users to its third-generation mobile network and sold them more value-added data services.

The world's largest mobile carrier by number of subscriber accounts is racing China Telecom Corp. and China Unicom (Hong Kong) Ltd. to boost average revenue per user by adding users of 3G mobile services, which offer faster data speeds at a higher price than older second-generation services.

China Mobile has accrued the largest number of 3G users among the three rivals, but its use of homegrown technology has put it at a disadvantage by limiting its access to popular 3G smartphones for customers.

China Mobile said its net profit for the six months ended June 30 rose to CNY61.28 billion ($9.59 billion) from CNY57.64 billion a year earlier. The net profit was higher than the average CNY60.46 billion forecast of eight analysts polled by Dow Jones Newswires.

China Mobile's operating revenue in the period rose 8.8% to CNY250.08 billion from CNY229.82 billion a year earlier, higher than the average CNY246.64 billion forecast in the poll. Revenue from fees for value-added services such as text messages and wireless data services rose 18.5% to CNY80.45 billion from CNY67.91 billion.

Monthly ARPU-a key industry gauge for mobile carriers' future prospects-continued to slide, falling to CNY70 from CNY72 a year earlier, partly due to what China Mobile said was a need for lower prices among tough competition. Chief Executive Li Yue, speaking at a news briefing, said it may take three to four years for ARPU to stabilize as the company keeps adding subscribers from low-income rural areas.

China Mobile for years has said it is in talks with Apple Inc. to offer the company's popular iPhone handsets, which China Unicom is currently the only Chinese carrier to offer. China Mobile Chairman Wang Jianzhou said in May Apple planned to use a fourth-generation mobile technology on the iPhone that would be compatible with China Mobile's future 4G network.

Wang said Thursday that talks are ongoing and the company can't give a timetable for a deal with Apple, but current iPhone owners are "welcome" to use China Mobile's network, which offers 2G services compatible with the iPhone. China Mobile's 3G network isn't compatible with the iPhone. China Mobile declared a first-half dividend of HK$1.58, up from HK$1.417 a year earlier.