China Mobile pips UK's Vodafone as leader by revenue

China Mobile has overtaken Vodafone of the UK to become the world's largest mobile operator by revenue. Although the Chinese network has held the top spot based on customer numbers, about 500 million by the end of June, for many years, Vodafone has consistently earned more money from its smaller base, because of its strong market share in the high-spending economies of western Europe.

However, China Mobile has just reported mobile revenues of US$17 billion (Dh62.44bn) for the second quarter of this year, edging out Vodafone, on less than $16bn, for the first time. Vodafone, which has spent hundreds of billions of dollars acquiring and building networks across the world in the past decade, is now facing increasing competition in both emerging and developed markets. While China Mobile also faces competition, it dominates its home base, where it accounts for almost 75 per cent of China's 675 million mobile users. Unlike Vodafone, China Mobile has yet to build a significant overseas footprint, with a network in Pakistan its only overseas operation. But the company still has enormous growth potential in its domestic market, where less than half the population owns a mobile.

"Whichever way you look at it, China Mobile is now the undoubted leader of the pack," said John Dinsdale, an analyst at TeleGeography, a research group. "We expect that its leadership position will be substantially strengthened over the coming years." The unparalleled size of its domestic market means China Mobile can use subscriber growth to boost revenues, even as its customers spend less. In the first half of this year, average customer spending on the network dropped by more than 10 per cent to 75 yuan (Dh40) a month.

But more than 35 million new customers, more than all the mobile subscribers in the GCC, pushed the company into the lead, where analysts expect it will stay. TeleGeography predicts that the Chinese mobile market will grow by 10 per cent in the coming year, against an average of 2 per cent in western Europe. [e-mail]