March 16 (Bloomberg) -- China Mobile (Hong Kong) Ltd., the world's largest cell-phone operator by users, posted a 27 percent gain in fourth-quarter profit as customers used handsets to download games and send text messages.

Net income rose to 16.7 billion yuan ($2.08 billion) from 13.1 billion yuan a year earlier, as sales gained 23 percent. Fourth-quarter earnings were derived by subtracting nine-month figures from full-year results released by the Beijing-based company today.

Chief Executive Wang Jianzhou is raising revenue by offering more services such as video downloads and lifting coverage in rural areas, where more than 900 million people live. The company increased its market share in China, the world's fastest-growing major economy, to 66 percent last year from 64 percent in 2004.

``China Mobile seems to be still gaining market share even though they're already the biggest,'' said Mark Canizares, a Manila-based analyst who covers Hong Kong and China stocks for CitisecOnline. ``They're making progress, which means they're good at what they're doing.''

The median estimate of six analysts in a Bloomberg survey was for fourth-quarter profit of 14.3 billion yuan. Sales climbed to 66.9 billion yuan from 54.6 billion yuan. Rainie Lei, a China Mobile spokeswoman, declined to confirm the derived figures.

Capital Spending

The company said capital spending last year rose to 71.5 billion yuan from 64.7 billion in 2004. Spending this year will increase to 83.3 billion yuan.

The 2006 expected capital spending doesn't include investment for the construction of a high-speed wireless network, the company said.

China Mobile plans to pay a dividend for 2005 of HK$1.02 per share, compared with HK$0.66 a year earlier, and proposed a final dividend of HK$0.57 per share, up from HK$0.46 in 2004.

China Mobile, which offers global system for mobile communications, or GSM, services, gained 42.4 million subscribers last year for a total of 246.7 million.

The nation's mobile-phone users will rise to 34 percent of the 1.3 billion population this year from 30 percent in 2005, government data show.

Subscriber Growth

Smaller rival China Unicom Ltd., the country's second- largest mobile operator, which offers services using both the GSM and code division multiple access standards, added a combined 15.7 million users last year for a total of 127.8 million.

Subscriber growth was partly offset by lower spending by each customer. China Mobile's monthly average revenue per customer, or ARPU, an industry measure of the size of a phone bill, fell to 90 yuan last year, from 92 yuan in the same period a year earlier.

That's less than the ARPU of 6,920 yen ($58.20) at Japan's NTT DoCoMo Inc., the world's No. 2 cellular operator, in the quarter ended Dec. 31. China Mobile is the world's third- largest mobile operator, while Vodafone Group Plc is the market leader.

China Mobile's lower revenue per user reflects a higher proportion of pre-paid clients, who typically spend less. China Mobile had 185 million pre-paid subscribers and 61.3 million contract users as of Dec. 31.

New Revenue

Chief Executive Wang, 57, is boosting revenue from new businesses such as short-messaging services, or SMS, ringtone downloads and wireless services such as emails and games.

A total of 249.6 billion short text messages were sent last year, compared with 172.6 billion a year earlier. About 206.7 million subscribers used mobile data services in the period, up from 156.8 million a year ago.

Non-voice services made up 20.6 percent of revenue in 2005, or 50.2 billion yuan, compared with 15.5 percent in 2004, the company said.

Fixed-line phone network operators China Telecom and China Network Communications Group Corp., are trying to enter the cell-phone market.

The two companies are slowing promotions of a city-wide cordless service called Little Smart with cheaper rates than for cellular calls as they prepare for the government's issuing of high-speed wireless licenses, which allow subscribers to video conference and download movies faster on their handsets.