The average estimate of 22 analysts polled by Thomson Financial put full-year net profit of the listed unit of China’s largest mobile operator at 40.19 billion yuan (US$2.29), up from 35.56 billion yuan in 2003.

China Mobile is scheduled to report its 2004 earnings Friday, the first of the four listed Chinese telecom operators to do so.

Analysts said stable subscriber growth, an increase in the number of provincial networks, and a more benign competitive environment were the key factors that supported China Mobile’s profit growth last year.

In 2004, China Mobile added 38.179 million subscribers, bringing total users to 204.292 million. In the second half of 2004, the number of provincial networks owned by China Mobile rose to 31 after the company completed the purchase of 10 networks from its parent China Mobile Communications Corp. for US$3.65 billion.

“China Mobile has managed to grow its subscriber base stably, on average 3 million customers per month, in a competitive environment,” said ICEA Securities analyst Bertrand Chui.

Chui noted that China Mobile was able to execute a less segmented market strategy than rival China Unicom Ltd., which operates both GSM and CDMA, or code division multiple access, networks.

Analysts generally place less importance on the profit growth of Chinese telecommunication companies than companies in other sectors as acquisitions have in the past been a key factor in boosting the numbers. Rather, they look for guidance on the trends for pricing competition, average revenue per user, or ARPU, and future capital expenditure commitments.

Credit Suisse First Boston analysts Edison Lee and Jeffrey Tan said China Mobile turned in a solid performance in the fourth quarter of last year and are optimistic for the outlook in 2005.

China Mobile’s dividend policy will also be a focus of the earnings announcement.

(Shenzhen Daily March 9, 2005)