Competition between mobile phone carriers squeezes profits

Increased competition in China’s mobile phone sector is squeezing domestic carriers’ profits, the Financial Times reported. China Mobile’s net income for the quarter ending September 30 increased 2.8% to US$4.19 billion, reversing a slight drop recorded in the second quarter but continuing the sharp slowdown in overall profitability from the first half. China Telecom saw its third-quarter net earnings drop 48% from a year earlier to US$350.10 million, a sharper fall than in the first half of 2009. China Telecom blamed its weaker profits on declining fixed line services. Chima Mobile did not give a reason for its nearly flat growth. The slowdown in profit growth comes at a time when China Mobile, China Telecom and China Unicom roll out their third generation mobile phone services. All three carriers are in a fierce battle for subscribers after a government-led industry restructuring in 2008.