China Mobile reported a 6.3% decline in shareholder profit to 78.9 billion yuan for the six months ended June 30, 2026, while operating revenue fell 1.1% to 538 billion yuan. Earnings per share stood at 3.64 yuan. The company stated that after excluding the impact of VAT policy adjustments, both operating revenue and shareholder profit achieved positive growth on a comparable basis.
Beyond the pressured telecommunications services segment, revenue from computing power services grew 14% to 52.9 billion yuan, with AIDC (Artificial Intelligence Data Center) revenue surging 486% and intelligent computing services revenue rising 130%. The company declared an interim dividend of 2.51 yuan per share, up 0.3% year-on-year. Free cash flow increased significantly by 111.6% to 53.9 billion yuan, demonstrating operational resilience.
Revenue and Profit Under Pressure, Policy Adjustment is the Main Factor
In the first half of the year, China Mobile's main business revenue reached 452.7 billion yuan, down 3.1% year-on-year. Communication services revenue, the primary drag, fell 5.7% to 350.4 billion yuan.
The company attributed the revenue decline to three main factors. First, a VAT policy adjustment effective January 1, 2026, raised the applicable VAT rate for mobile data, SMS/MMS, and broadband access services from 6% to 9%, directly impacting the revenue calculation. Second, the mobile communications market is transitioning between old and new growth drivers. Third, the overall market environment has become more complex. EBITDA was 173.6 billion yuan, down 6.6% year-on-year, with the EBITDA margin on main business revenue at 38.4%. The cost of goods sold increased 12.6% to 84.1 billion yuan, further eroding profits. Basic earnings per share decreased from 3.90 yuan in the prior period to 3.64 yuan.
Computing Power Business Becomes Key Growth Driver, AIDC Revenue Nearly Quintuples
Against the backdrop of a pressured main business, computing power services emerged as a performance highlight and a core focus of the company's strategic transformation. In the first half of the year, computing power services revenue reached 52.9 billion yuan, up 14% year-on-year. This included data center revenue of 19 billion yuan, up 13.2%, and AIDC revenue jumping 486.1%, demonstrating particularly strong growth momentum. Intelligent computing services revenue was 5.3 billion yuan, up 130.1%, contributing 46.1% of the incremental revenue from computing power services.
Mobile Cloud's influence continued to grow. According to a report released by IDC in April 2026, its public cloud revenue scale entered the top three in the domestic industry for the first time. Revenue from computing power and intelligent services combined accounted for 22.6% of total main business revenue, an increase of 2.2 percentage points from the same period last year, indicating a clear trend in structural optimization. In terms of computing infrastructure, the company's total intelligent computing capacity reached 112,700 PFLOPS (FP16), with an in-network resource utilization rate exceeding 90% and average inter-computing latency falling below 12ms.
Intelligent Services Progress Steadily, International Market Expands Rapidly
Intelligent services revenue grew 0.9% year-on-year to 49.3 billion yuan, a relatively moderate pace, but several sub-segments showed active performance. Data algorithm revenue increased by 6.9%, and digital cultural revenue grew by 12.5%. According to the company, 360 million person-times used Migu Video's AI-powered smart viewing features during the World Cup. The international market performed strongly, with revenue of 18.2 billion yuan in the first half, up 30.1% year-on-year (including the consolidation of Hong Kong Broadband Network revenue). The company had 463 global POP points, international transmission capacity of 437 Tbps, and a 59.9% increase in inbound roaming traffic. The number of Chinese enterprises going overseas served by the company grew by 19.6% compared to the end of last year.
On the user front, mobile customers reached 1.011 billion, a net increase of 5.88 million. 5G network customers totaled 687 million, a net increase of 44.74 million. Broadband connected customers numbered 337 million, a net increase of 7.7 million. IoT card connections reached 1.511 billion, a net increase of 29.58 million. Mobile internet data traffic grew 16% year-on-year, with a notable acceleration in growth rate.
Cash Flow Improves, Dividend Arrangements Optimized
Despite profit pressure, the company's cash flow showed significant improvement. Net cash inflow from operations was 114.9 billion yuan, up 37% year-on-year. Free cash flow reached 53.9 billion yuan, a 111.6% increase year-on-year, providing strong support for shareholder returns. The company adjusted its dividend arrangements, starting from the 2026 interim period, dividends will be declared and valued in RMB, with Hong Kong shareholders able to choose to receive dividends in Hong Kong dollars or RMB. The interim dividend is 2.51 yuan per share, equivalent to 2.9003 Hong Kong dollars per share, a 5.5% increase year-on-year, based on the exchange rate announced by the People's Bank of China in the week before the board's declaration. The company stated that the full-year 2026 payout ratio will be "stable with an upward trend." Capital expenditure in the first half totaled approximately 59.2 billion yuan, an increase of about 3.4 billion yuan year-on-year, primarily directed towards network expansion and computing power infrastructure construction.
Looking Ahead: Accelerating AI Transformation
Looking to the second half of the year, the company faces external pressures that are unlikely to dissipate quickly. The impact of the VAT policy adjustment will persist, and the competitive landscape for communication services still presents structural challenges. In its performance report, the company acknowledged that "the industry has entered a critical period of transitioning between old and new growth drivers," facing certain uncertainties.
Strategically, the company plans to accelerate its transformation from a telecommunications operator to a technology services company, focusing on deploying AI-native applications around a "Token Operations" model. It has established a Token Office and a Computing Power Office to coordinate related resources. The company stated its aim is to "become a leading mobile intelligent service provider," concentrating on expanding the computing power market and scaling up the implementation of intelligent services. For investors, whether the growth trajectory of the computing power and AI-related businesses can continue to rise and offset the structural decline in communication services at a sufficient scale will be a key dimension for measuring the effectiveness of China Mobile's transformation.
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