China Mobile, the world's top mobile phone firm, beat forecasts on Wednesday with a 37 percent rise in quarterly profit, amid healthy subscriber growth.
China Mobile posted net profit of 27.2 billion yuan ($3.85 billion) for the three months ended Dec. 31, compared with 19.9 billion yuan a year earlier. The result beat an average of analyst forecasts for net profit of 23.61 billion yuan, according to 27 analysts polled by Reuters Estimates.
Full-year net profit rose 32 percent to 87.1 billion yuan in 2007, compared with an average forecast of 83.5 billion yuan.
Rapid growth in China's economy, rising consumer purchasing power and the development of the rural economy are driving demand for communication services, the company said in a statement.
But some analysts said the advent of a long-awaited restructuring of China's telecoms sector may bring in increased competition and pressure for China Mobile, which dominates the world's biggest telecoms arena.
"As the Chinese government proceeds with the reform of the telecommunications industry, the industry landscape and competitive environment may experience certain change, creating both new challenges and opportunities," Chief Executive Wang Jianzhou said in the statement.
As subscriber growth in China's big cities slows, China Mobile is also battling fiercely with smaller rival Unicom to sign up more rural customers.
China Mobile proposed an ordinary final dividend of HK$1.16 per share, as well as a special dividend of HK$0.016 per share.
The company's shares had fallen more than 24 percent so far this year through Tuesday, compared with a fall of 23 percent in the Hang Seng Index, as fears of a U.S. recession weigh on global markets.
The firm won a net average of 5.67 million customers per month in 2007 and serviced more than 369 million users -- a net increase of just over 68 million subscribers.
Monthly average revenue per user, or ARPU, was maintained at 89 yuan. The net profit margin was 24.4 percent.
China Mobile's full-year revenue rose to 357 billion yuan, up 20.9 percent from a year earlier.