Life is pretty good if you are part of a de facto duopoly that provides services to a potential market of more than 1.3 billion people. Such is the case for China Mobile
Thanks to millions of new subscribers signing up for wireless services every month, dominant China Mobile has been one of China's hot stocks, soaring 89% so far this year. China Unicom isn't looking too shabby either, rising 27% year to date. But the good times may not last if the government follows through with a plan to introduce new competition to the market.
Chinese news agency Xinhua reported over the weekend that Xi Guohua, vice minister of China's Ministry of Information Industry (MII), spoke of issuing new licenses that would permit fixed-line operators China Netcom
Like many other nations around the world, China's fixed-line operators are seeing more and more subscribers cancel service in favor of mobile plans. Here in the U.S., major telecoms such as AT&T
The issuing of new mobile licenses in China may only be part of more widespread, ongoing restructuring in the industry, however. Rumors have been circulating for years that the MII was considering splitting China Unicom and merging the parts into China Netcom and China Telecom. China Unicom operates two different mobile networks, one developed using Qualcomm's
With the Beijing Olympics fast approaching in the summer of 2008, China is also keenly interested in demonstrating its homegrown, next-generation cellular technology on the world stage. To give the local technology a firm footing, licenses will likely also have a technology specification included.
With all the moving parts involved, it's difficult to precisely assess the outcome of a major industry overhaul by the Chinese government. But one aspect is certain -- changes in the wireless status quo will mean more competition for giant China Mobile, not less.
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