China Mobile, the world's largest mobile phone operator by number of subscribers, grew by more than 20 per cent in the first half of 2007.

The company claimed that it signed up more than 31 million new customers to bring its total to 332 million.

Half of the new users were from rural areas, which are home to 60 per cent of China's population.

Metropolitan areas are beginning to approach saturation, and China Mobile has invested heavily in improving its network coverage outside China's cities.

"At present, 750 million people in China live in rural areas and only 18 per cent of them have mobile phones," Wang Jianzhou, chairman of China Mobile, told a press conference.

"With ample potential in the market, the company will continue to focus on exploring business in rural areas."

China Mobile has also worked to expand its user base by subsidising handset purchases and reducing call costs.

Despite subsidies of approximately $527.49m, net profit at China Mobile in the first half rose more than 25 per cent to hit $5bn. Revenues increased 21.6 per cent to reach $21.97bn.

China Mobile's close links to the government have enabled it to grow rapidly to prodigious size, faced only with token competition in the form of China's other mobile phone carrier, the much smaller China Unicom.

However, analysts predict that the government will allow stronger competition in future by licensing two new mobile carriers to join the market after long-delayed 3G mobile networks are introduced.

This broadening of the market is expected to start in time for the 2008 Olympic Games in Beijing.