The company has been hit by greater competition and the need to target less profitable rural consumers as urban markets become saturated.

"We can't preserve such a [high] margin for the long term," chief financial officer Xue Taohai warned.

China Mobile predicted further falls in average revenue per user in the coming months.

Its results were also hit by the economic slowdown as well as spending on an expensive new third-generation network.

It had warned in March that it would not be able to escape the effects of the downturn.

It had 493 million users at the end of June.

The operator is now facing stiff competition from smaller mobile rivals such as China Unicom and China Telecom.