China Mobile Ltd. ADRCHL

Morningstar Rating

Stock Research and Analysis

by Dan Su

China Mobile dominates the mobile market in China with a 72% share. Thanks to unrivalled scale efficiency, superior network coverage and a well-known brand, the carrier is in an enviable position to capitalize on the growth potential in China, where Read more

Bulls Say

China Mobile controls over 70% of the wireless market in China. The economies of scale should give the firm an edge in acquiring new customers and help cement its lead.

With superior network coverage and a strong brand, the carrier boasts of high customer loyalty, especially among high-end business users.

China Mobile can step up its efforts to acquire more subscribers while its main competitors are still working on business integration as a result of the telecom industry restructuring in 2008.

China Mobile stands to benefit from the shutdown of personal handy-phone system (PHS), a low-cost alternative to wireless services with over 20 million subscribers. Some of the PHS users may become China Mobile subscribers. Read more

Bears Say

China Mobile may face unfavorable policies from the government aimed at bolstering the competitive position of smaller rivals China Unicom and China Telecom.

China Mobile faces strong competition in the 3G market, where its services based on the nascent TD standard have yet to gain popularity among mobile subscribers. The carrier has signed up only 1 million 3G users so far, compared to a subscriber base of 498 million by the end of July 2009.

Since the TD standard is new and does not have a well-established supplier network, China Mobile has hit speed bumps in its efforts to expand network coverage and provide services.

The lack of support from handset makers has led to a limited supply of TD handsets, higher prices and less reliable performances.

The fixed-line business of China Mobile is miniscule compared to than that of China Unicom and China Telecom. Competitors may be able to lure subscribers away with bundled services of mobile, fixed-line, and broadband access. Read more

Strategy

China Mobile aims to continue expanding its subscriber base and increasing scale efficiency by offering more innovative and user-friendly services that attract and retain customers. Already one of the Read more

Management

China Mobile is controlled by State-owned China Mobile Communications Corporation (CMCC), which owns 74% of the firm. Wang Jianzhou, who is also the CMCC president, has been chairman and CEO of China Mobile since November 2004. Wang has more than two Read more

Profile

China Mobile provides wireless voice and value-added services through GSM networks covering mainland China and a substantial part of Hong Kong. Starting in January 2009, Read more

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