BEIJING (AP) — China Mobile Ltd., one of the country's three major state-owned phone carriers, said Thursday its profit rose just 1.5 percent in the first half, dented by fierce competition and the costs of adapting to new technologies.
The Beijing-based phone company said it earned 62.2 billion yuan ($9.9 billion) in the first half. Revenue rose 6.6 percent to 266.5 billion yuan ($42.3 billion).
China's state-owned phone carriers have been squeezed by intense competition and the high cost of rolling out technology to support smartphones, tablet computers and other products.
"We faced a number of severe challenges including the increase in mobile penetration, intensified competition, as well as the impact of new technologies and services that are replacing traditional communications services," said chairman Xi Guohua in a statement.
China Mobile, the world's biggest phone carrier by number of subscribers, said it added 33.5 million mobile accounts in the first half, bringing its total customers to 683 million.
China Mobile grew rapidly as customer demand shifted to wireless service, overtaking rival China Telecom Ltd. as the country's biggest carrier. That prompted Beijing to restructure the industry in 2008 into three groups, each with mobile and fixed-line assets, to revive competition.
The three rivals have focused on mobile phones and nontraditional services such as wireless Internet access to drive revenue growth as demand for traditional fixed-line services declines.