Summary of Key Points
China Mobile's revenue (538 billion yuan, down 1.1%) and profit (78.9 billion yuan, down 6.3%) in the first half of 2026 have slightly declined, but its traditional communication business remains stable. Its transformational services (such as computing power and intelligent solutions) are growing rapidly. The company has shifted its capital expenditure towards these areas and introduced a "token management strategy" for the AI era. Additionally, there have been positive developments in customer loyalty, traffic growth, and the signing of computing power projects, indicating strong resilience overall.
Detailed Analysis
1. Traditional Business Stabilized but Under Pressure
Communication services are China Mobile's main source of revenue, accounting for 350.4 billion yuan in the first half of the year. The company still has a vast customer base: 1.011 billion mobile users (covering almost all Chinese citizens), 337 million broadband subscribers, and 1.511 billion IoT card holders (used by smart devices like watches and shared bicycles). Mobile data traffic even increased by 16%. However, the overall revenue and profit decreased because traditional voice and data plan services have reached growth bottlenecks. Although demand for data is rising, the average price per usage has decreased, leading to lower total revenue and profits. Nevertheless, the company's core business remains solid enough to support its transformation.
2. Transformational Services Booming as New Growth Drivers
China Mobile is focusing on computing power and intelligent services, which now account for 22.6% of its revenue (an increase of 2.2 percentage points from last year):
- Computing Power Services: Revenue was 52.9 billion yuan, accounting for 11.7%. The income from artificial intelligence data centers (AIDCs) surged by 486%, with the signed computing power capacity reaching 7GW (enabling support for numerous AI training and inference tasks), an almost doubling of capacity in the first half of the year. This shows a surge in demand for AI computing power, and China Mobile has seized this opportunity.
- Intelligent Services: Revenue was 49.3 billion yuan, accounting for 10.9%. The company launched more than 50 industry-specific AI solutions (e.g., for risk management in banking and quality inspection in manufacturing), with a 12.8% increase in revenue. Financial technology revenue also more than doubled, possibly due to intelligent financial services such as payments and credit. During the World Cup, MiGu Video's AI features were used by 360 million users (e.g., AI commentary and smart replays), and revenue from digital culture services increased by 12.5%. These developments indicate that intelligent services are becoming increasingly popular.
3. Capital Expenditure Allocated to Key Areas
In the first half of the year, China Mobile spent 61 billion yuan on investments, a 4.5% increase from last year, with a shift in funding priorities:
- Expenditures on traditional communication networks (e.g., building base stations) decreased by 9.8% because there are already enough base stations.
- Expenditures on computing power networks (building data centers and purchasing AI servers) increased by 71.3%, and those on intelligent networks (developing AI application platforms) increased by 85.2%. This is like reallocating household budgetary resources: less money is being spent on the living room (traditional services) and more on the study (new businesses) to build strength for the AI era.
4. New Approach in the AI Era: Token Management Strategy
China Mobile has introduced a "token management strategy," using tokens as the core unit of operation in the AI era. Tokens can be thought of as "building blocks" in the digital world, used to measure and manage services for both individuals (e.g., AI-powered chat and recommendations) and businesses (e.g., computing power rentals). For example, each use of AI translation consumes a token, and businesses pay based on the number of tokens used. The company is building "token factories" using its mobile cloud and AIDCs to produce tokens and utilizing the MoMA platform to manage computing power efficiently. This move aims to gain an advantage in the AI era by operating its services in a new way.
5. Three Positive Developments Indicating a Bright Future
The company has reported three significant improvements:
- Stable Customer Base: The number of mobile users increased by 5.88 million, and the churn rate decreased, indicating that customers are more likely to stay with the service.
- Double-Digit Traffic Growth: Data traffic grew by 16% in the first half of the year, faster than before, largely due to AI-driven applications (e.g., AI-generated videos and intelligent services that consume more data).
- Surge in Computing Power Projects: Revenue from AIDCs quadrupled, and the scale of large-scale projects doubled, indicating strong market demand.
These developments suggest that China Mobile's transformation is starting to yield results, and there is significant potential for future growth.
Conclusion
Although traditional business activities are showing some weakness, China Mobile's investments in AI and computing power are beginning to bear fruit. By continuing to focus on its new initiatives, the company has a promising future ahead.