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Ministry backs out of talks about WeChat

By He Wei in Shanghai | China Daily | Updated: 2013-04-24 09:15

The announcement comes as China Mobile Ltd's most recent quarterly profit growth was stagnant for the first time in three years, as the world's largest telecom carrier grappled with booming Internet-enabled telecom services and high handset subsidies.

Its net income increased to 27.88 billion yuan ($4.5 billion) in the first quarter of 2013, up only 0.3 percent year-on-year, the company said on Monday.

That contrasted with a moderate revenue surge during the same period, up by 5.7 percent to reach 134.7 billion yuan, as well as a steady growth in subscriber numbers.

The company is quickly transforming its vast but lower-value 2G user base into 3G users, with its 3G client base expanding by 26.4 million from January to March. That almost triples the pace of 3G user development throughout 2012.

Decreased voice services, however, contributed to reduced earnings. The monthly usage of voice services in the first quarter slipped 2.98 percent year-on-year to reach 488 minutes per user each month.

Given that voice business accounted for almost two-thirds of total revenue last year, it weighs heavily on the company's average revenue per user, or ARPU, which registered a rare double-digit dip of 11.3 percent in the first quarter to 63 yuan.

China Mobile, the only Chinese carrier that hasn't clinched a deal with Apple Inc to sell iPhones in the world's biggest mobile market, has applied high subsidies to entice users by signing up contracted phones that work on its indigenous TD-SCDMA 3G network.

Last year, the operator invested 105 billion yuan, up 8.3 percent year-on-year, in customer subsidies and enhanced sales channels. It did not disclose these figures in its latest quarterly release.

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