* Says met with Jobs on introducing iPhone on its network
* Apple, China Mobile hope to launch iPhones as soon as
* H1 net profit up 6.3 pct, quickest pace since H2 2008
* H1 ARPU per month down at 70 yuan vs 72 yuan year ago
* Shares close down 0.6 pct vs 1.3 pct fall in broader
(Adds chairman, fund manager quotes)
By Lee Chyen Yee and Huang Yuntao
HONG KONG, Aug 18 China Mobile said it
hoped to launch Apple iPhones soon to accelerate uptake of
high-end 3G services as it reported first-half profit at the top
end of expectations.
The world's largest mobile operator by subscribers said it
has met with Apple chief executive Steve Jobs several
times on introducing an iPhone based on its home-grown TDSCDMA
The companies hope to launch an iPhone as soon as possible,
China Mobile's Chairman Wang Jianzhou said, without giving any
Though China has a massive growing mobile market, only 80
million are 3G users, with the rest low-end 2G subscribers who
mainly own cellphones to make calls only.
As of end-June, China had 907 million mobile phone users,
bigger than the entire population of Europe.
China's three telecom carriers have been battling falling
average revenue per user (ARPU) as they offer aggressive
subsidies to widen their user base in the world's biggest mobile
China Mobile, China Unicom and China Telecom Corp
Ltd are trying to attract 3G and smartphone users by
offering subsidised handsets from Apple, Samsung Electronics
and HTC for multi-year contracts.
So far, China Unicom is the only carrier to offer iPhones.
"Even if China Mobile strikes an agreement with Apple to
sell iPhones, that may not translate to more profitability in
the near term because it will create more intense competition,"
said Patrick Shum, president of BMI Funds Management.
"The telcos will try and undercut each other by offering
more subsidies," he said.
China Mobile's ARPU per month in the first half was 70 yuan,
down from 72 yuan during the same period a year earlier, with
CEO Li Yue expecting ARPU to fall further in the second half.
China Mobile, which had 616.8 million subscribers as of June
including 35 million 3G users, reported net profit rose 6.3
percent to 61.3 billion yuan ($9.6 billion) for the six months
ended June, compared with a forecast for 59.8 billion.
First-half profit growth was the fastest since an 18 percent
increase in the second half of 2008.
Shum from BMI Funds Management said China Mobile's prospects
were better than the other two Chinese operators in the long
term because of its plans to roll out 4G-LTE (long term
"China Mobile has the most ... subscribers and that will
improve its bottom line if it rolls out a more advanced
technology compared to its other competitors," he said.
The operator already has 7.44 million iPhone users on its
network, even though it did not sell the smartphone through its
retail network, China Mobile executives said at a news
conference after the release of its results.
Apple currently does not support China Mobile's network and
iPhone subscribers using the carrier do not have access to 3G
"I met Steve Jobs several times already, but we haven't come
to an agreement yet," China Mobile's Wang told a news
conference. "All I can say is, it's a common wish of China
Mobile and Apple to come to an agreement as soon as possible."
Smartphones account for just a fraction of the country's
mobile-phone market, prompting Apple to say it was merely
"scratching the surface" in China.
Even though China has a huge number of mobile phone
subscribers, the penetration rate is only around 70 percent,
compared with neighbouring Hong Kong's about 200 percent.
China Mobile shares, which have lost 2.7 percent
so far this year, closed down 0.6 percent on Thursday in a
broader market that fell 1.3 percent.
(Editing by Chris Lewis, Vinu Pilakkott and Hans-Juergen