China Mobile says Q2 profit up

Workers man a China Mobile relay station near the Qinghai-Tibet railway July 3, 2006. (REUTERS/Claro Cortes IV)

HONG KONG (Reuters) - China Mobile <0941.HK>, the world's largest wireless operator, posted a 51 percent rise in quarterly profit on strong subscriber growth, but faces new competition in China's revamped telecoms sector.

With Beijing beginning to overhaul the world's largest telecoms industry, China Mobile and smaller rival China Unicom <0762.HK> continue to aggressively seek customers in rural areas as markets in major cities become saturated.

On Wednesday, China Mobile said net profit for the three months ended June amounted to 30.7 billion yuan ($4.48 billion) versus the 20.34 billion yuan it booked during the same period last year, according to Reuters calculations of previously reported figures.

That result beat an average forecast of 27.66 billion according to 5 analysts polled by Reuters.

The firm also posted 44.7 rise in first-half profit to 54.8 billion yuan, beating a consensus forecast of 52.49 billion yuan.

In May, Beijing announced that Unicom will buy China Netcom <0906.HK>, the smaller of China's two fixed-line carriers, and sell its smaller Code Division Multiple Access network to fixed-line leader China Telecom <0728.HK> <CHA.N>, creating new competitors to China Mobile.

Shares in the firm shed nearly 9.5 percent during the second quarter, lagging the Hang Seng index's <.HSI> 3.3 percent slide.

(Reporting by Joseph Chaney; editing by Jonathan Hopfner)