China Mobile Ltd, the world's largest mobile operator by subscribers, posted a 6.3 percent rise in net profit for the first six months, logging the fastest half-year growth since 2008 as the carrier tries to attract more high-end 3G users.
China's three telecom carriers have been battling falling average revenue per user (ARPU) as they offer aggressive subsidies to widen their user base in the world's biggest mobile phone market, which has more than 900 million subscribers.
China Mobile, China Unicom and China Telecom Corp Ltd are all trying to attract higher-end 3G users and smartphone subscribers by offering subsidized handsets from Apple Inc, Samsung Electronics Co Ltd and HTC Corp for multi-year contracts.
Cross-industry competition arising from the convergence of industries, intensified competition among traditional telecommunications industry players and the slowdown of growth all present challenges, the company said in a statement.
The carrier, which had 616.8 million subscribers as of June including 35 million 3G users, reported a net profit of 61.3 billion yuan ($9.6 billion) for the six months ended June.
That was roughly in line with an average forecast of 59.8 billion yuan from seven analysts and up from 57.6 billion yuan a year earlier.
First-half growth was the fastest since an 18 percent increase in the second half of 2008.
Even though China has a huge number of mobile phone subscribers, the penetration rate is only around 70 percent, compared with neighboring Hong Kong's about 200 percent. Many subscribers are low-end 2G users in rural towns and villages.
China Mobile's average revenue per user (ARPU) per month in the first half was 70 yuan, up from 67 yuan in the first quarter.
China Mobile shares, which have lost 2.66 percent so far this year, fell 0.6 percent on Thursday morning versus the main Hang Seng Index's flat performance.
(Reporting by Lee Chyen Yee and Huang Yuntao; Editing by Muralikumar Anantharaman and Chris Lewis)