China Mobile released its earnings report of first half year as of June 30, 2019.

According to the financial report, China Mobile’s operating income in the first half year reached 389.4 billion yuan, down 0.6% year-on-year, of which communication services revenue reached 351.4 billion yuan, down 1.3% year-on-year; shareholders’ profit attributable to 56.1 billion yuan, earnings per share was 2.74 yuan, down 14.6% year-on-year.

China Mobile said in the announcement that as the traditional communication service market becomes saturated, the traffic dividend will quickly fade away. Simply relying on traditional factor input to promote performance growth is unsustainable, the industry as a whole shows negative growth, and the company’s revenue and profit are also under greater pressure.

At the subsequent performance briefing, Yang Jie, chairman of China Mobile, said that China Mobile’s annual capital expenditure this year did not exceed 166 billion, down from 167.1 billion last year, of which the investment in 5G is estimated to be 24 billion yuan. “Even if 5G is considered, the total capital expenditure will not increase significantly.” Yang Jie said that 2020 to 2022 is the peak period of 5G investment, but China Mobile will control the total investment, and it is necessary to seek truth from facts and actively promote 5G. It takes time to mature technology and industry, and we must grasp the rhythm.

China Mobile pointed out that the total capital expenditure will not increase significantly in the next year, but this does not mean the attitude towards 5G. “No matter how the total investment is controlled, the proportion of 5G in total investment is still very large. This year we invest 24 billion yuan which is a large amount of money. We also see the development prospects of 5G, including 2B’s business and some social needs.” After the 5G investment increased, China Mobile said it would significantly reduce the investment of many traditional businesses, including 4G. It will operate through 5G+4G, and open 4G in reverse by 5G to meet the needs of 4G. In addition, the next step is to reduce the unit input cost and control the overall investment.”

It worth being pointed out that at the beginning of this year, China Mobile executives said that the total investment including 5G in 2019 will not exceed last year (167.1 billion yuan), and the capital expenditure without 5G will be 144.9 billion yuan. In other words, the 5G investment plan for 2019 is about 17 billion yuan, from the original 17 billion yuan to the current 24 billion yuan.