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China Mobile is to cut back on its capex spend between now and 2012, with the bulk of its 3G network now in place. In the meantime it will look to enhance the services on its TD-SCDMA network and look for growth opportunities abroad, before a second wave of intense capital spending from 2012, mainly geared to TD-LTE and upgraded backhaul.

During its full year earnings call, China's largest cellco said it will start to rein in on capex, cutting it from CNY129.4bn in 2009 to CNY123bn ($18bn) this year. This figure is then expected to fall to CNY98bn in 2011 and CNY80.4bn in 2012, by which time the 3G network will be complete.

According to figures from China's Ministry of Industry and Information Technology, the country's three operators invested a combined CNY160.9bn ($23bn) last year in their 3G networks. As of the end of the year, there were 13.25m 3G subscribers, 5m of them on China Mobile's service. The cellco's target is to raise this figure to 10m by the end of 2010, and it will increase spend on handset subsidies by 30% to help achieve the goal.

It will also extend the range of devices to tempt users to its network, especially as it starts to overcome early teething troubles with the performance and reliability of the unproven TD-SCDMA technology. On its wishlist is a version of the iPhone 3GS for its network, though CEO Wang Jianzhou said at the earnings conference that Apple had not yet responded to his request to discuss such a product.

There would be little technical difficulty in creating a TD-SCDMA iPhone. As Wang said, "TD-SCDMA is not that hard to do - Research in Motion is doing it'. And Nokia and others are putting TD-SCDMA basebands into several 3G models. The obstacles are more likely to be commercial and political. Talks between Apple and China Mobile have reportedly broken down three times before, mainly because of the manufacturer's insistence on control of the user interface and app store, while Mobile wants all its handsets to run under its own oFone user experience. China Unicom already offers the iPhone on its W-CDMA network.

China Mobile recorded operating revenue of CNY452.1bn ($66.1bn) for the year, up almost 10% on 2008, and a 2.3% year-on-year increase in profit attributable to shareholders, of CNY115.2bn ($16.9bn).

But as competition at homes hits margins, the cellco is looking for "additional growth and opportunities overseas", said Wang in an interview with Dow Jones Newswires, with the focus on Asia and Africa. However, he will avoid "high priced assets", staying away from bids for Zain's African operations or a stake in Nigerian state telco Nitel (Unicom, by contrast, is said to be involved in one group pursuing that investment).

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