China Mobile's net profit down

China Mobile reported a net profit drop of almost 15 percent year on year in the first half, attributed to increased spending on 5G and the lower cost of mobile communications, the carrier said on Thursday.

In the first six months, its net profit was 56.1 billion yuan (US$8 billion), 14.6 percent down from a year ago. Revenue reached 389.4 billion yuan, down 0.6 percent from a year ago.

By the end of June, China Mobile’s subscriber base reached 935 million.

China is likely to invest US$184 billion on 5G by 2025 — half of Asia’s total budget of US$370 billion. A good 28 percent of China’s mobile connections will be on 5G networks by 2025, accounting for about a third of all 5G connections globally, according to industry association GSMA.

Chinese carriers are eagerly looking for opportunities in 5G, including cloud computing, the Internet of Things and AI.

"We have faced pressures to keep revenue growing. 5G may bring that opportunity,” Yang Jie, China Mobile’s chairman, said at an industry conference in June.

China Mobile is the world’s No. 1 mobile carrier and has more than 3.98 million base stations nationwide. In the 5G era, the carrier will seek opportunities in the Internet of Things, used for device-to-device connections in manufacturing and in the home.

The Ministry of Industry and Information Technology, the industry regulator, has urged carriers to cut telecommunications costs to boost information consumption.

The policy has put pressure on the profitability of all carriers, including China Mobile.