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China Mobile, the world’s largest wireless operator, on Thursday unveiled strong turnover and profit growth for the first half of this year thanks to robust demand in rural areas.

The Hong Kong-listed company also said it added a record number of users for the fourth straight month in July, bringing its total number of subscribers to 278.3m – the world’s largest.

Fast-growing customer figures have driven China Mobile’s shares up 40.87 per cent this year, helping the company to overtake Vodafone as the world’s largest cellular company by market value last month.

China Mobile has been pushing more sales in China’s poorer regions as it seeks growth before Beijing awards 3G mobile licences.

Wang Jianzhou, chairman, on Thursday said falling handset prices – to as little as Rmb300 ($38) – and rapid income growth in rural households have allowed the company to add a record number of users in the first half, when half of China Mobile’s new 25.78m customers came from rural areas.

Although average revenue per users in rural areas are lower than in cities, Mr Wang said costs to acquire customers are often lower too, by about 20 to 30 per cent, due to cheaper marketing costs.

“China’s central and western regions as well as rural areas have large populations and low penetrations. They are our biggest opportunities now,” Mr Wang said.

Easing competition in China’s mobile market and growing demand for value-added services have also helped China Mobile to lift its sales and achieve better profitability in the first half.

But analysts warned that the addition of more low-paying users would put pressure on China Mobile’s bottom line going forward.

For the first six months to June, China Mobile’s sales grew 19.6 per cent to Rmb137bn, while net profit jumped 25.5 per cent to Rmb30.2bn. Average revenue per user dropped from Rmb90 a month last year to Rmb88. The results are in line with analysts expectations.

China Mobile declared a surprise special dividend of HK$0.09 and said it would pay a special final dividend.

The company also said its state-controlled parent group would continue to look for acquisition opportunities in emerging markets.

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