China Mobile Communications Corp, the parent of the world's most
valuable phone company, will use "patience" in its overseas
expansion plans.
Instead, the carrier will focus on winning clients in rural
areas of its home market, Bloomberg News reported.
"The problem now is that prices of phone companies in emerging
markets are too expensive," company President Wang Jianzhou said at
the meeting of the World Economic Forum in Davos, Switzerland,
yesterday.
"We're not in a hurry, we have patience."
The Beijing-based company, which has more customers than the US
population, hasn't made any purchases abroad since last year's
US$284 million takeover of Pakistan's Paktel Ltd. Chinese
mobile-phone users jumped 17 percent in the first 11 months in
2007, the second-fastest growth among major wireless markets after
India, led by demand from smaller towns and villages.
"It's not in their interest to be all that aggressive if there
is nothing to buy and it's not their first priority," Jeffrey Tan,
an analyst at Credit Suisse Group, said. "There is a lot of
potential in the rural market where there is a low penetration
rate, as long as they can keep the costs down."
China Mobile Communications owns almost 75 percent of Hong
Kong-listed China Mobile Ltd, whose shares fell 3.5 percent to
close at HK$116.10 (US$14.87) in Hong Kong yesterday. The stock has
dropped 16 percent this year after doubling in 2007.
Tan rates shares of the world's biggest mobile-phone company by
users as "outperform" with a price estimate of HK$153.
China Mobile's US$298 billion in market capitalization makes it
the world's most valuable phone company, according to Bloomberg
data.
The carrier added 68.1 million users in China last year for a
total of more than 369 million. Smaller rival China Unicom Ltd had
about 160 million customers.
"Growing in big cities has become more difficult, therefore our
focus is on mid- and small-sized cities and rural areas," Wang
said. "Last year, more than 50 percent of new users came from rural
areas. This year it will still be the case."
China's government has urged local technology companies to
increase investments in African and Southeast Asian nations that
the country is deepening ties with. Wang said in April of last year
that China Mobile Communications planned to acquire companies in
Africa and Southeast Asia.
(Shanghai Daily January 25, 2008)
