7 million new consumers … per month

Once again, China Mobile added more than 7 million subscribers in April. Even if this represents a “small” decrease compared to February and March (the decline is officially caused byseasonal weakness), the company is well on track to reach its target of adding 80 millions users by the end of the year. Its rival, China Unicom gained “only” 1.5 million mobile phone users in April, down from 1.62 million a month earlier. This leaves us with 400 million mobile users for China Mobile and 168 million for China Mobile.

Who are these new consumers? Mainly low-end users (in rural areas) which is leading to a decrease in the average revenue per minute of usage. Average revenue per user (ARPU) is logically falling: it fell by 10% since last December to under USD 10 per month. Though worrying, China Mobile maintained an EBITDA margins above 50% in 2007.

At the same time the fixed operators keep losing customers. China Telecom fixed-line subscribers fall by around 1 million per month (half a million for China Netcom). Both companies are compensating with gains in broadband users (around 500’000 per month).