China Mobile Could Find Its Next Leg Of Growth Outside Of China

by Trefis Team
China Mobile
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China Mobile (NYSE:CHL) has requested bids from consulting companies for research projects analyzing opportunities in five countries: Germany, South Africa, Brazil, Portugal, and North Korea, according to a recent report. While interesting, it’s too early to say that this would result in another international foray, especially since China Mobile’s venture into Pakistan through CMPak (China Mobile Pakistan) didn’t pan out particularly well for the company. Below we look at each of the five countries and potential expansion plans the company could pursue.

See our full analysis for China Mobile’s stock here


According to Research and Markets, Germany is the largest wireless market in Western Europe with 114 million subscribers and an estimated $54 billion market size. The country provides an interesting opportunity for China Mobile to leverage its TD-LTE expertise thanks to its significant investments and field studies in the technology. The penetration of 4G LTE in Germany is currently at 3% and estimated to rise to near 20% by 2017. TD-LTE has benefits due to the relative availability and cost of TDD spectrum (compared to FDD spectrum which is used for most LTE networks). As smartphone penetration rises and data usage sees a corresponding increase, the early adoption of 4G LTE will help carriers in Germany avoid a spectrum crunch similar to the one that American carriers are currently experiencing.

South Africa:

South Africa is the largest wireless market in Africa at 54 million subscribers, [1] accounting for nearly 13% of the total subscribers on the continent. The 4G rollout in South Africa is still in its nascent stage and with China Mobile’s technical prowess, it has the leverage to partner with an existing carrier. Presently, there are four operators: Vodacom, MTN, Cell C and Telkom. Among the four carriers, Cell C can be considered a contender for a potential partnership with China Mobile. Cell C has invested in HSPA+ and is lagging behind Vodacom and MTN in terms of subscribers. Cell C is majority owned by Oger Telecom (division of Saudi Oger).


The emerging market would be an exciting opportunity for China Mobile. Brazil currently has nearly 257 million subscribers and all of its carriers are testing LTE networks. Also Brazil doesn’t have MVNOs, and thus China Mobile would need to find an existing carrier to partner with. Oi Movel could benefit from a JV with China Mobile, as Oi is the smallest wireless carrier and is losing subscribers. A joint venture with China Mobile would allow the company to leverage China Mobile’s experience with building out TD-LTE as well as its resources, allowing it to better compete with the bigger players. Oi Movel recently announced a technological collaboration with Portugal Telecom, and may be open for further partnerships.


The wireless market in Portugal is similar to China’s. It has three primary operators – TMN (7.3 million subscribers), Vodafone Portugal (6.6 million) and Optimus (2.5 million) – which control the market. Portugal Telecom has a market cap of around $5 billion, and could be within the reach of China Mobile. Portugal is going through a major recession and with record unemployment, it might not make financial sense to enter this market at this stage. However, on the other hand, the comparatively low valuations could motivate China Mobile to get its foot in the door in a developed market.

North Korea:

North Korea currently has one wireless provider, Koryolink, which is a joint venture between Orascom Telecom and the government. The carrier recently announced crossing a million subscribers and given the small market size, it would be interesting to see why China Mobile would want to venture.

After staying away from the international markets for a while, now could be a good time for China Mobile to pursue overseas ventures to leverage its LTE expertise. The long term benefits of TD-LTE, primarily the availability of spectrum, make it attractive to carriers. Although it is too early to say if China Mobile will go ahead with its international plans, the company’s interest in researching potential markets is a positive sign that the company is not resting on its achievements in China and is hungry for growth.

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  1. International Telecommunication Union []
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