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[BEIJING] China Mobile Ltd saw US$9 billion erased from its market value after the company posted its largest annual profit drop since 1999 amid rising spending on a new high-speed network.
Shares in Hong Kong slumped 3.3 per cent, the most since September. Net income dropped 12 per cent to 26.7 billion yuan (S$5.9 billion) in the fourth quarter, according to figures derived from annual results the Beijing-based company reported on Thursday.
The world's biggest carrier by subscribers, which started offering Apple Inc's iPhone 6 in October, spent more to promote its fourth-generation network to stoke demand for data sales. Costs to market and support the faster service, which makes watching videos or streaming music easier for smartphone users, helped drag yearly profit down by 10 per cent.
"The results are slightly below my expectations for both sales and net," said Ricky Lai, a Hong Kong-based analyst with Guotai Junan International Holdings Ltd. "The company had to launch incentive programs to migrate 2G subscribers to its 4G network." The push to get older subscribers to upgrade also lowered the average revenue per user, as traditional 2G customers consume less data after they shift, Lai said.
The stock closed at HK$100.10 in Hong Kong, paring this year's gain to 11 per cent.
China Mobile had 800 million subscribers at the end of December, which included more than 90 million on the new 4G network, the company said.