China Mobile will spend more this year to improve its 4G mobile network after recording its first annual profit drop in 14 years, according to Reuters.

The company said this week it will increase capital spending by around 22 percent to 225.2 billion yen ($36.34 billion), according to Reuters.

One-third of this, or approximately 75 billion yen, will go towards expanding the high-speed 4G service that was launched back in December.

China Mobile feels it will sell 100 million 4G devices and have 50 million 4G users before the end of the 2014.

This prediction was made after the January launch of Apple iPhone on its network.

China Mobile believes that subscribers will use larger amounts of data as more people connect by using apps, like WeChat, which are carried on a user's data plan to avoid the SMS fees.

Capital spending will peak in 2014 and 2015 before declining in 2016, in order to build up the network required to create that shift, said Chief Financial Officer Xue Taohai during a press briefing, according to Reuters.

China Mobile executives said recently that sales of the iPhone are well below previous expectations.

Analysts predicted sales to reach 17 million units in the first year after the launch, but sales are drastically below expectations.

"Most of our 1.34 million 4G users are using an iPhone," said China Mobile Chairman Xi Guohua. "It's just been getting started for one or two months. So far it's hard to tell how that will affect our business," he said.

For all of 2013, China Mobile's net profit fell to 121.8 billion yen, the first drop since 1999. Revenue from data services in 2013 increased 24 percent to 206.9 billion yen, according to Reuters.

China is the world's biggest smartphone market with more than 500 million mobile Internet users

"The exponential growth in mobile Internet, brought forward fiercer competition across the industry and an era driven by data traffic operation," Xi said in the earnings statement on Thursday.

China Mobile gained 375 million subscribers in February, according to Reuters. China Mobile's 776 million users made up 62 percent of China's 1.25 billion subscribers during the same month.

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