China Mobile: Poor 3G Approach Yields Weak Results 中移动3G策略不当 拖累公司三季度业绩
China Mobile (HKEx: 941; NYSE: CHL) continues to struggle under the uninspired leadership of outgoing Chairman Wang Jianzhou, with third-quarter profit growth slowing to 3.7 percent, or about half the second quarter’s rate of 7 percent. (English article) I’m probably being too tough on Wang, as clearly fierce competition for 3G subscribers with rivals China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) is the main reason for the profit slowdown. In fact, China Mobile has boosted its 3G subscriber campaign considerably in the last few months, as more phones and other devices that can run on its homegrown technology come to market. But while Wang should be commended for finally using China Mobile’s dominant market position to promote 3G, he continues to provide uninspired leadership that simply sees the new standard as a way to power cooler-looking smartphones, many of them low-cost models made by the likes of ZTE (HKEx: 763; Shenzhen: 000063) and Huawei. Instead of focusing on this lower end of the market, Wang and China Mobile should be chasing higher-end subscribers who use 3G for its powerful data transferring speeds to enable a wide range of mobile Internet applications, which provide much fatter profit margins. Instead, most of my friends here in Shanghai still overwhelmingly use 3G services from Unicom and China Mobile for their wireless web surfing, even though most complain of spotty coverage: a shortcoming that China Mobile could easily exploit to steal some of these more lucrative subscribers. It looked for a while like China Mobile might get some help at the high end with the roll-out of a 3G iPhone from Apple (Nasdaq: AAPL) for its service, but suddenly that initiative seems to have gone quiet. (previous post) As I’ve said before, Wang was an OK leader for his time, helping China Mobile consolidate its position as the country’s dominant mobile carrier during his 5 or 6 years as chairman. But he really needs to step down soon, a development that looks likely, and hand over the company to younger new leadership that really understand where the mobile world is heading.
Bottom line: China Mobile’s uninspired third-quarter results are largely a result of its poor approach to the 3G market.
Related postings 相关文章:
◙ China Mobile: Where’s the 3G iPhone? 中移动4G网络稳步推进 3G版iPhone或遇阻
◙ China Mobile Shuffle: Sea Change Coming? 中移动高层变动或引发重大变化？
◙ TD-LTE Hits First Delay, More to Come? TD-LTE技术首次延期 未来还会更多？
