China Mobile Cuts CAPEX

China Mobile has announced that it is cutting its capital expenditure plans for the next couple of years, without citing a reason for the reduction. The company announced in a presentation that CAPEX for last year was US$5.1 billion, down on the intended US$5.5 billion. This year and next, CAPEX was expected to be US$5.4 billion, but this has been cut to US$4.5 billion and US$4.1 billion respectively. The expenditure for 2004 is provisionally set at just US$3.8 billion. These figures significantly do not include any potential 3G costs, apart from a minimal budget for 3G trials and development. Whether that means China Mobile does not expect to build a 3G network until 2005, or is reducing CAPEX in preparation for a "to be announced" 3G rollout remains to be seen.

The company also said that it increased its subscriber base by a net 24.51 million last year, after loosing 5 million subscribers mainly due to the shut down of the analogue TACS network. The company ended the year with 69.64 million subscribers, a market share of 72.4%, slightly down on the previous year. Contract customers totaled just over 34 million, and PrePay subscribers came to 35.6 million. Churn increased to 6.6%."

Posted to the site on 18th March 2002