China Mobile has posted the smallest rise in quarterly profits in the past three quarters as higher costs ate into the gains from an increased subscriber base.
Net profit for the first quarter was almost flat at RMB 27.9 billion (US$4.5 billion), compared to RMB 27.8 billion a year ago. The company has been hurt by increased handset subsidy costs as more consumers upgrade to smartphones.
The company faced "unprecedentedly intense market competition and more apparent substitution of traditional communication business by new technologies and new businesses," China Mobile Chairman Xi Guohua said in a statement.
Revenues however rose by 5.7 percent to RMB 134.7 billion.
China Mobile added 26.4 million 3G users -- taking its total 3G customer base to 114.4 million subscribers. The company's total customer base exceeds 700 million.
The company also recently announced that it would increase its investment in LTE based networks by nearly 50% this year. Total capex is expected to exceed US$7 billion.
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