Apple Inc. (NASDAQ:AAPL) finally tied the knot with China Mobile, and many investors and analysts expect that deal to boost Apple’s sales. But at what cost to China Mobile’s bottom line? Analysts at multiple firms have been slashing their earnings projections for China Mobile Ltd. (NYSE:CHL) (HKG:941) since that deal was announced.

Apple China Mobile Deal

Apple, China Mobile start roll-out this month

China Mobile has been taking preorders for the iPhone for some time, although the handset will not officially be available on the carrier’s network until later this month. The iPhone has already been on China’s two other major carriers—China Telecom and China Unicom—since September. As a result, China Mobile will have a bit of catching up to do.

In addition, The Wall Street Journal reports that China Mobile Ltd. (NYSE:CHL) (HKG:941)’s rivals now have interconnection fees which are lower. That started this week as part of the Chinese government’s attempt to increase competition within China’s mobile industry.

Analysts cut China Mobile projections

Analyst Colin McCallum of Credit Suisse said he cut his 2014 net profit forecast 9.1% and his price target by 6% based on the carrier’s deal with Apple Inc. (NASDAQ:AAPL). He factored in lower interconnection fees for the carrier’s competitors and increased his subsidy projections by 5.3 billion yuan, bringing it up to 36.8 billion yuan. And he’s not the only analyst who believes China Mobile will be stuck paying more in subsidies because of Apple this year. Mizuho Securities analyst Marvin Lo is projecting a 10% decline in net profits for China Mobile this year, with a 7% decline being attributed to an increase in subsidies on handsets.

China Mobile saw its January to September profit margins decline in 2013 as competition from both China Telecom and China Unicom increased throughout the year. In 2013, many analysts are expecting China Mobile to report its first yearly decline in profits since 1999, largely because of investments as the massive carrier rolls out 4G technology.