The Chinese government is finally kicking off a long-rumored overhaul of its telecommunications industry. The news sent shocks through Asian markets, at one point knocking more than 13% off shares of China's largest mobile firm, China Mobile
The new domestic telecom industry organization apparently will look a lot like the brave new world I've discussed before -- China Netcom, China Telecom
In this form, the Chinese market will look like the U.S., where AT&T
The reforms in China will also usher in a new wave of mobile services -- the government stated that the long-awaited licensing of next-generation services will follow the realignment of the companies. Equipment suppliers such as Nokia
So with all the good things that the reorganization is designed to bring, why all the pessimism around China Mobile? The government has already gone as far as to allow the much smaller wireless competitor China Unicom
As such, China Mobile's overwhelming dominance has actually set up a scenario where being bigger isn't necessarily better -- at least in the near term. But there's still an immense amount of detail missing in the new telecom industry plan, and only time will tell just how reforms will affect each company. Investors averse to volatility may be more inclined to watch this event unfold rather than participate.
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