Investment Updates News
- China Mobile seeks to buy overseas assets
Date: 25-Apr-2007 Sources: (Shenzhen Daily)
CHINA Mobile Communications Corp., parent of the world's largest wireless operator by market value, plans to buy companies in Africa and Southeast Asia as growth accelerates in those regions.
'We are interested in neighboring countries in Southeast Asia and some other emerging markets like those in Africa,'' Wang Jianzhou, president of the Beijing-based company, said yesterday. He declined to identify companies or say if an acquisition was likely this year.
China Mobile Communications, parent of Hong Kong-listed China Mobile Ltd., is looking overseas because most new customers in its home market are farmers, who typically spend less on phones than people living in cities. 'Growth rates in Southeast Asia and Africa are going to be faster than those in China, which is the main attraction,'' Allan Ng, an analyst at Bank of China International in Hong Kong, said. 'The value of these markets remains to be seen, but companies are interested now because of their potential.''
China Mobile Communications in February paid US$284 million for 89 percent of Pakistan's oldest mobile-phone carrier Paktel Ltd. from Millicom International Cellular SA.
China Mobile failed to buy Luxembourg-based Millicom, an operator of wireless networks in Latin America, Asia and Africa, seven months earlier, and had tried to acquire Pakistan Telecommunications Co., the nation's second-biggest mobile carrier, in 2005.
'It's a bad time for buyers in emerging markets because the acquisitions are very expensive,'' Wang said. China Mobile Communications will remain rational about acquisition choices, he said.
The company seeks to parlay its experience running Hong China Mobile Ltd. to other emerging markets with a low user base. China's government is also urging companies to venture abroad as the domestic market is open wider to foreign firms as part of World Trade Organization commitments.
'In terms of profitability, the prices of telephone assets in Asia and other emerging markets are expensive, but in terms of potential, the prices are cheap,'' Johnny Yeh, an analyst with Quam Ltd. in Hong Kong, said.
China Mobile added 14.9 million subscribers in the first quarter, or an average of 5 million a month, exceeding Singapore's population.
Monthly average revenue per customer fell to 85 yuan in the first quarter, from 86 yuan a year earlier.
Vodafone Group, the world's largest mobile phone company, doesn't plan to sell its stake in China Mobile, Wang said.
'I have spoken to Vodafone CEO Arun Sarin and chairman John Bond and they have said very clearly there is no such plan,'' Wang said.
China, the world's biggest mobile-phone market, added 6.5 million users in February for a total of 473.9 million, according to ministry figures. The nation gained 67.7 million wireless users last year, more than the population of France.
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