"We started up 720,000 4G base stations and established the world's largest quality 4G network covering a population of more than one billion people," it said in the filing, adding that it was "facing severe challenges from intensified competition".
HONG KONG: China Mobile said Thursday (Mar 19) that net profit for 2014 fell more than 10 per cent, its largest annual drop in over a decade, because of increased spending as the company upgraded to the 4G network.
The firm's net profit was 109.28 billion yuan (S$24.4 billion) last year - a 10.2 per cent drop from 121.69 billion yuan in 2013, failing to meet analysts expectations. Costs incurred to promote the faster 4G network dragged profits down, Bloomberg News reported.
The world's biggest mobile operator by subscribers started selling Apple iPhones for the first time in January of last year and was granted a licence to operate the faster 4G data network in China in 2013.
"The results are slightly below my expectations for both sales and net," Ricky Lai, a Hong Kong based analyst with Guotai Junan International Holdings told Bloomberg. "The company had to launch incentive programs to migrate 2G subscribers to its 4G network."
It comes despite a 5.1 per cent increase in customers to over 800 million, it said in a filing to the Hong Kong stock exchange, where it is listed. Operating revenue was up 1.8 per cent at 641.45 billion yuan, while operating expenses were up nearly six per cent to 524.11 billion yuan.
Sales in the fourth quarter fell 4.2 percent to 160.2 billion yuan. That compares with the 165.8 billion-yuan average of four analyst estimates compiled by Bloomberg.
China Mobile had 800 million subscribers at the end of December, which included more than 90 million on the new 4G network, the company said. China Mobile projects capital spending this year will drop about 6.5 percent to 199.7 billion yuan, from the 213.5 billion yuan spent last year, Xi said.