Fellow Fool Tom Taulli raised good points about two main concerns he has with China Mobile
One point Tom and I actually agree on: The quality of subscribers, and hence the "quality of growth," is drooping as the carrier signs on more rural customers who spend less on services. But this is a natural stage of development for massive companies that move beyond smaller, high-margin customer bases to capture much larger mass markets -- which has already been demonstrated by large operators such as Alltel
On the regulatory front, I think the normal "China risk" investors consider for any company in the PRC is lessened a bit in this case, for a few reasons. First, the Chinese Ministry of Information Industry (MII) views telecommunications as vital to the country and wants to see continued growth in the area. The MII has even stated it has expectations for at least 600 million wireless subscribers by 2010. With the Olympics coming in 2008 and the MII's desire to make communications a core sector within China, China Mobile is in the catbird seat when it comes to making the government's wishes turn into reality.
Eventually, the growth in new subscribers in China will taper off, but I think this is still years away. When it does happen, though, China Mobile has a massive pile of cash (nearly $20 billion at the end of 2006) available to buy interests in other global operators, much like Vodafone
So while the landscape will definitely change for China Mobile in the future, I think its position is still strong enough to make it an attractive investment.
Fool contributor Dave Mock wishes he had the purchasing power to command 50% discounts -- two corn dogs for the price of one would be sweet! He owns no shares of companies mentioned here. Dave is the author of The Qualcomm Equation, which is also published in Chinese. China Mobile is a Global Gains selection. Wal-Mart and Vodafone are Inside Value recommendations. The Fool's disclosure policy scales beyond normal economic boundaries.