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China Mobile seeks to expand across the globe

2014-03-05 10:44 China Daily Web Editor: qindexing
A China Mobile Corp advertisement in Xuchang, Henan province. Geng Guoqing / for China Daily

A China Mobile Corp advertisement in Xuchang, Henan province. Geng Guoqing / for China Daily

CEO hopes to boost firm's profits by tapping overseas 4G markets

China Mobile Ltd is actively seeking opportunities to take its fourth-generation telecommunication technology abroad, a powerful entrance for the world's biggest carrier onto the global stage, a company executive said on Tuesday.

China Mobile Chairman Xi Guohua said exploring foreign markets not only meets the national call but also will boost the company's international profits.

"The company has been lagging behind in developing overseas markets. We are looking to expand our 4G business outside China by means of investment and acquisitions," Xi told China Daily during a break in a meeting of the National Committee of the Chinese People's Consultative Conference.

He declined to identify any potential merger targets.

Last December, Beijing-based China Mobile became the first carrier to launch 4G Time Division-Long Term Evolution service in the country.

TD-LTE technology was developed by several multinationals and mainly supported by Chinese enterprises since its launch.

China Mobile currently has about 200,000 4G TD-LTE base stations in China's larger cities and economically developed regions in coastal provinces. The total number is on track to hit 500,000 by the end of this year.

In January, the company persuaded Apple Inc to make iPhones compatible with TD-LTE networks. The long-discussed partnership indicates that mainstream hardware manufacturers are accepting the China-backed telecom system.

China Mobile is hoping to sell 200 million TD-LTE powered devices - including iPhones - in China this year, said Xi.

The nation will have 30 million to 60 million 4G users by 2014, according to the China Academy of Telecommunication Research, a government think tank.

A more internationally recognized 4G standard fits Chinese companies' interests and also will help China become a rule maker in the future, analysts said.

"TD-LTE is becoming accepted by major markets, which could be a chance for Chinese companies to extend their business reach outside China," said Cao Shumin, CATR president.

SoftBank Mobile Corp in Japan and US-based Sprint Corp are the most active overseas TD-LTE supporters, Cao said.

SoftBank is seeking to cover 97 percent of the Japanese population using the technology and plans to set up about 50,000 base stations by the end of this year, according to the academy.

Sprint is building 38,000 stations across the United States, it added.

"More than 20 nations have adopted the 4G TD-LTE technology. We are now ready to explore European and US markets," said China Mobile's Xi.

China Mobile made its first overseas acquisition in 2007, when its parent company bought Pakistani telecom operator Paktel Ltd for about $300 million.

The Chinese operator is also looking to expand to Hong Kong, where competition among carriers is heavier than on the Chinese mainland.

The southern city's wealth of telecom talent and positive investment environment will make it a good starting point for China Mobile's exploration of overseas markets, according to Xi.

There is a bigger demand for LTE overseas than in China, because the nation's 4G service kicked off only about three months ago.

Global subscriber numbers for LTE networks, where users are increasingly trying out 4G services, is on track to hit 400 million in 2014, said Cao. The amount is set to break 1.5 billion by 2017, she estimated.

"The rise of super-fast 4G networks was accompanied by an inevitable drop in older standards such as the Global System for Mobile and Wide-band Code Division Multiple Access," said Cao.

"That means carriers have to adopt new business models because unprecedented Internet traffic brought by 4G and even 5G networks will fundamentally change the way people use their smartphones," she added.

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