China Mobile Limited (600941.SH) recorded declines in both revenue and profit during the first half of 2026, with net profit attributable to shareholders falling for three consecutive quarters. The company's traditional telecommunications services contracted due to VAT policy adjustments, the ongoing shift between old and new growth drivers, and evolving market conditions. Simultaneously, both the personal and enterprise markets experienced deterioration in either ARPU or customer base metrics.
As the company confronts growth limitations in its legacy operations, it is accelerating investments in AI and computing power infrastructure to establish new revenue streams. However, these emerging segments have thus far generated insufficient incremental gains to offset the downward pressure from traditional businesses, while user penetration of the company's AI products still requires substantial improvement.
Traditional Business Weakness Puts Pressure on Both Core Markets
According to the 2026 interim report, China Mobile achieved operating revenue of RMB 538.035 billion in the first half, down 1.05% year-on-year, while net profit attributable to shareholders reached RMB 78.934 billion, a decline of 6.3%. Both metrics moved lower simultaneously. As of the reporting period end, the company's total mobile customers reached 1.011 billion, with broadband subscribers totaling 337 million.
The revenue decline was primarily driven by a weak second quarter, during which revenue contracted 3.02% to RMB 271.557 billion and net profit dropped 7.48% to RMB 49.592 billion. This marks the third straight quarter of compressed profitability. Notably, in February of this year, the three major domestic telecom operators announced adjustments to the applicable scope of VAT categories for telecommunications services, raising the VAT rate on mobile data, SMS/MMS, and broadband access services from 6% to 9%, with the companies flagging that this change would impact both revenue and profits.
Compounding the issue, China Mobile's telecommunications service segment faced headwinds amid the transition between old and new growth engines and market conditions. In the first half of 2026, telecommunications service revenue totaled RMB 350.4 billion, down 5.7% year-on-year. Behind this contraction, the company's three core business lines鈥攙oice, SMS/MMS, and wireless internet access鈥攃ontinued their persistent decline, generating revenue of RMB 30.9 billion, RMB 14.1 billion, and RMB 174.3 billion respectively, falling 9.5%, 12.3%, and 10.8% year-on-year.
Although the wired broadband segment and application and information services achieved growth, their incremental contributions proved insufficient to fully offset the impact of declines in traditional wireless internet access and other legacy services. The wired broadband business specifically saw its growth rate decelerate further, with revenue reaching RMB 72.1 billion, while growth slowed from 8.9% in the prior-year period to 5.1% this year.
Breaking down by market, both the personal and enterprise segments faced significant pressure. In the personal market, mobile internet customers reached 895 million in the first half, yet mobile ARPU continued its downward trajectory, falling 8.9% year-on-year to RMB 45.1. In the enterprise market, the customer base contracted from 34.84 million in the prior-year period to 33.82 million, representing a 2.9% decline.
Worth noting is that, driven by the widespread adoption of post-paid models in enterprise business and lengthening receivables cycles, China Mobile's accounts receivable have risen steadily, climbing from RMB 54.881 billion at the end of 2023 to RMB 99.762 billion by the end of 2025, a cumulative increase of 82%. As of June 30, 2026, receivables had further swelled to RMB 122.239 billion, up 15.51% year-on-year, diverging from the trend in revenue.
On the international front, China Mobile accelerated the expansion of its capabilities overseas, with roaming traffic volume surging 59.9% in the first half, and the cumulative number of Chinese enterprises going global served by the company growing 19.6% compared to the end of the prior year. However, in terms of revenue scale, international market revenue reached RMB 18.2 billion, accounting for just 3.38% of total revenue during the period鈥攁 relatively minor share.
Intelligent Services Momentum Lags, Token Business Needs Time to Deliver
Facing intense competition for existing customers in traditional voice and basic data services, China Mobile has stated it will continue to ramp up investment in intelligent computing infrastructure and AI computing power, leveraging mobile cloud, AIDC, and industry digital solutions to tap incremental growth opportunities. According to media reports, the company underwent significant organizational and resource reallocation in the first half to support intelligent service development: it established a Computing Power Office and a Token Office, refined the responsibilities of its mobile cloud subsidiary and China Mobile Jiutian AI Technology (Beijing) Co., Ltd., and reassigned a substantial number of internal top talents to the AI business lines. Additionally, incremental capital expenditure has been increasingly directed toward AI infrastructure and AI technology innovation.
From a revenue structure perspective, in the first half of 2026, revenue from AIDC, intelligent computing services, and cloud-computing applications all grew at varying rates, lifting computing power service revenue by 14% year-on-year to RMB 52.9 billion. However, this segment's revenue scale remains limited, representing less than 10% of total revenue for the period, and its incremental gains are insufficient to counterbalance the downward pressure from traditional businesses.
In contrast, China Mobile's intelligent services segment delivered a relatively lackluster performance. Despite advancing the AI-ification of products and services and promoting new applications such as intelligent agents and MobileClaw, this segment generated revenue of RMB 49.3 billion in the first half, up only 0.9% year-on-year. The low user penetration of the company's AI assistant Lingxi intelligent agent has not shown meaningful improvement. With total mobile customers exceeding 1 billion, the monthly active users of Lingxi reached over 130 million, representing less than 13% of the base, meaning more than 80% of mobile users have yet to engage with the intelligent service. This highlights that, while the product matrix continues to expand, there remains considerable room for improvement in user reach, scenario integration, and stickiness building.
Interestingly, amid the surge of the Token economy, China Mobile is actively seizing this development opportunity, allocating substantial resources across products, platforms, and ecosystems. At the recent interim results briefing, company executives revealed plans to launch a unified national Token package pricing model for both public and enterprise markets. The company has completed the design of multiple Token pricing tiers and conducted pilot programs in several provinces during the first half, with the next step focused on expanding the user base of Token products. According to industry perspectives, Token, as a new billing unit, still requires time to validate its business model and ecosystem construction. The industry as a whole remains in the pilot and planning stage, with pricing and scheduling mechanisms still under exploration. Converting Token usage into sustainable revenue and profit represents a key challenge that operators must overcome. For China Mobile, its Token business is far from achieving scale revenue contribution. Whether the company can seize pricing dominance in the "new pipeline" competition hinges on the attractiveness of its MoMA platform ecosystem and the implementation of its pricing plans, the effectiveness of which will need to be verified through future financial results.
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