The parent of China Mobile (0941) has readied itself to pay more into central government coffers under a new law.
From 2011, 15 percent of profits generated by state-owned telcos rather than 10 percent must be paid to the government.
Daiwa Securities analyst Marvin Lo said parent China Mobile Group should "easily manage" the bigger burden without biting into the listed firm's payout prospects.
China Mobile chairman Wang Jianzhou said yesterday that it would be inappropriate to discuss dividends, but remarked: "We said at the start of the year that the payout ratio will be 43 percent this year."
Wang also said mobile tariffs are set to drop further, though that will not necessarily lead to more income. Tariff cuts no longer spur people to use phones more, he added, so China Mobile will seek to hold average revenue per user with new services. On that, it has met with Japan's Softbank. And China Mobile, which gets 30 percent of income from data services saw an "explosive" surge of 140 percent in data usage in a year, though some telcos recorded 300 percent. This has let 4G technology advance faster than expected, and Wang noted such network formation is not very costly.
Still, smartphones at about US$100 (HK$778) will be soon lift rural penetration from 30 percent, Wang said. Lo said rivals China Telecom (0728) and China Unicom (0762) already sell similar low-end handsets.