China Mobile Giants Gain

Following Michael Cai at Parks Associates post last week about China Mobile, The Wall Street Journal reports that "the two largest mobile-service providers in China disclosed strong growth in subscriber numbers for January, which analysts attributed to seasonal growth before the Lunar New Year holiday."

China Mobile, the largest network operator in China by subscribers, added 4.07 million subscribers in January, and now has 250.72 subscribers in total. China Unicom added 1.31 million subscribers in January, bringing its number of mobile-service customers to 129.10 million.

Nomura analyst Kelvin Ho noted "the strong growth in January was partly due to a promotion campaign by the two carriers ahead of the Lunar New Year holiday." He said, "It is true the new subscriber numbers reflect a trend of rising demand, but we have no expectations that the subscriber numbers will keep rising [on the base of January figures] this year."

ICEA Securities analyst Bertrand Chui also pointed out that "the holiday had a significant effect because more inbound travelers used prepaid phone cards during the period." he remarked, "The change has more to do with seasonal factors, instead of a change in market dynamics."

Despite the fast-growing subscriber base, Mr. Chui said investors' attitude toward Chinese mobile-service carriers is still affected by uncertainty over China's development of a third-generation mobile-phone network, which may increase carriers' capital spending significantly in coming years.

To put the size of China's mobile market in better perspective, China Telecom, the country's largest fixed-line operator by subscribers, brought the total number of its subscribers to 211.55 million.

Unlike more established communications markets, in certain countries it easier to go straight to mobile and bypass fixed line completely....