China Mobile: Improvement Ahead Under New Leaders 新领导有望助中国移动复苏

By newsdoug on January 4, 2012

On this final workday of 2011, I’ll start with a look at one of China’s longest-running retirements, namely the departure of long-serving Chairman Wang Jianzhou from the helm of China Mobile (HKEx: 941; NYSE: CHL), which finally may have happened, in what can only be described as a happy ending to a yet another uninspired year from the nation’s top mobile carrier. I say “may have happened”, as Wang’s final departure isn’t entirely clear just yet. Media are saying the latest copy of a recent document now lists Li Yue, president of Hong Kong-listed China Mobile, as chairman of the company’s state-run parent, a position formerly held by Wang. (Chinese article) Wang’s departure has been rumored for more than a year now, dating back as early as 2010 after Li was first named as president of the Hong Kong-listed China Mobile. Since then, Li and another executive, Xi Guohua, have taken a growing number of top titles at the listed company and its state-run parent, leaving just the chairmanship at both for Wang. (previous post) I suspect we may even see an official announcement from the Hong Kong stock exchange very soon saying Wang has finally been replaced as chairman of the publicly listed China Mobile as well. China Mobile has been a slow-moving disaster in 2011, as the company lost steady market share to rivals China Unicom (HKEx: 762; NYSE: CHU) and especially an aggressive China Telecom (HKEx: 728; NYSE: CHA) in the important 3G space. Wang’s uninspired leadership was at least partly to blame for the company’s anemic profit growth and loss of market share, and I’ve said numerous times that he should step down to make way for a new generation of more aggressive leaders with new ideas. Now that Wang’s departure has finally come, look for China Mobile to step up its 3G campaign significantly next year, which it has already shown early signs of doing by working more closely with handset makers to develop models for its network using a homegrown technology called TD-SCDMA. It’s obviously too early to say if Wang’s departure will breathe major new life into China Mobile in the year ahead; but it’s really hard to imagine how things can get any worse, and I’m cautiously optimistic that 2012 will see some exciting fresh initiatives from this sleeping giant.

Bottom line: 2012 will be an exciting year for China Mobile following the long-awaited retirement of its long-serving chairman, with younger new leadership making a reinvigorated drive in 3G.

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