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 was started in 1997. Originally it was called China Telecom (Hong
Kong) and then China Mobile (Hong Kong) and finally ›

 


 as we know it
today. Its public offering in 1997 generated capital of USD $2.5 million, and a further massive
investment of global capital (around USD $600 million) was made in 2004. Today it trades in 31
provinces of China and essentially offers a Global System for Mobile Communications (GSM)
which covers almost the entire nation. The business makes money from its voice-based services
and other value-added services such as SMS text, mobile e-mail and similar services.

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V China Mobile was listed fifth in Millward Brown's Brandz Top 100 Brands in 2007. This
would have be unheard of 10 years ago (or even less). The news means that the company
is becoming more than a business since it is now also a brand i.e. possessing brand equity
and brand value. Other Chinese brands to break the top 100 were the Bank of China, the
Chinese Construction Bank and IBBC. It is argued by many that Chinese companies are
not strong in relation to marketing but perhaps things are changing.
V The company has made good profits over recent years.
V China Mobile has gone down the acquisition trail on a number of occasions. In its early
days it took over Jiangsu Mobile (1997). Other important acquisitions include Fujian
Mobile, Henan Mobile, and Hainan Mobile (1999); - and Beijing Mobile, Shanghai
Mobile, Tianjin Mobile and Hebei Mobile (2000). These developments have delivered
strong growth.
V China Mobile is number one in the Chinese market. It recorded a 67.5% market share in
2006. It is the world's largest digital mobile company, and serves more customers than
any other mobile supplier.

  
V |ccording to the head of China Mobile, China's home-grown mobile technology is a few
years behind that of its international competitors since it was having problems with
handsets. Essentially 3G technology was lagging behind. Part of the problem was the
choice to swap to TD-SCDM|'s network which many would consider inferior to the 3G
technology offered by European and |merican alternatives (which their competitors have
decided to adopt).
V The company is not globally diversified. Telecoms companies tend to trade in more than
one country, usually through acquisition, joint-ventures or strategic alliances (for
example see the SWOT analysis of Bharti |irtel). This may leave the company exposed
if the Chinese market were to go into a deep or sustained decline.



 
V The Chinese economy has undergone enormous growth, which has lead to the huge
demand for mobile telephones, devices and technologies. |ccording to the Chinese
Government, China is the world's largest mobile market with 520 million mobile phone
users. This number could reach 600 million by 2010.
V Budget users in China are driving growth in the mobile telecoms sector. China Mobile
reported a net profit between January and March 2008 of around 24.1bn yuan (£3.4bn;
£2.2bn) which is a rise of 37% on 2007 according to BBC News.
V Since the cities have become saturated, much of the new growth is predicted for rural
China and it is this segment that is most likely to be targeted by the large operators. 3G
technologies provide the largest opportunity for China Telecom.

 
V New subscribers are mainly low-use, low-value. So average revenue is falling as the
mobile phone market matures and the market becomes more price competitive. So mobile
phone suppliers are awaiting the introduction of 3G mobile technologies to rejuvenate the
market and stimulate demand as Chinese customers consume the new added value
services.
V China Mobile could face more competition in the future as the Chinese Government
plans to allow more operators into the market. China Mobile has 70% of the 2G market in
China. China Unicom wants to become the biggest 3G operator, and China Telecom aims
to win 15% of the 3G market by 2010.
V China Mobile has a number of service obligations under agreements with the Chinese
(PRC) Government. So the business may be obliged to provide unprofitable services that
pay a social dividend. |dded to this the Ministry of Information and Industry has
allocated a limited frequency (44MHz) to the company which will not support large
numbers of subscribers in the future.