"Growth investors can hitch their portfolio to any number of Asian stars; I think one big winner is going to be China Mobile (NYSE: CHL)," says Tony Sagami in his specialized Asia Stock Alert.
"Mobile phones are much, much more than telephones to Asians. If you travel to Asia, one of the first things you'll notice is how most locals walking down the street have mobile phones glued to their ears.
"It would be a big mistake to think of China Mobile as simply a mobile phone provider. In addition to traditional calling services, the company offers value-added services such as voice mail, conference calling, instant messaging, text messaging, as well as accessing the Internet.
"Even though the price of computers has fallen dramatically in the last few years, a personal computer (PC) is still out of financial reach for the average Chinese. Meanwhile, mobile phones are both cheap and capable of many of the same functions as PCs.
"Look, $500 to $1,000 dollars for a PC may seem reasonable to you and me, but that is a small fortune for the typical Chinese consumer, who makes less than $3,000 a year.
"Thanks to the advances in WAP (Wireless Application Protocol), an international open standard makes it possible for wireless devices to provide all of the basic services of a computer-based web browser.
"WAP is now the protocol used for the majority of the world's mobile Internet sites and makes it possible to display Internet-contents on wireless devices.
"So mobile phones - not PCs - are the new computers in China. Once you understand that basic but very different use of cell phones in China, you will understand the gigantic e-commerce opportunity cellular phone companies are about to cash in on.
:The largest mobile phone carrier in China by leaps and bounds is China Mobile with more than 400 million subscribers. The company totally dominates in terms of market share. And that's not going to change anytime soon.
"Why? China mobile is 75% owned by China Mobile Communications Corporation (CMCC), which in turn is owned by the government of China, In fact, the President of CMCC, Wang Jianzhou, is also the CEO of China Mobile.
"There is no way that the Chinese government is going to do anything to hurt one of its most valuable assets and crucial telecommunication providers. If anything, the Chinese government will pave the way for China Mobile to prosper."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
Reader Comments (Page 1 of 1)
8-01-2008 @ 5:28AM
Henry said...
in fact, in china, no body would think it's strange, since it's the state-own business, the government would make sure to to thwe single biggest holder as well as holding more than 51%. China mobile is also puiblicly-listed in Hong Kiong stock market saying the path of starting the internationalization and attract more investers and strategic partners, how ever, the government also use the state-own funds and baks to own the share to be more than 51%. and in china, no body would complaint it and all people think it's normal even there are existed the anti-monopoly law and stock market share law. Since the China mobile phone industry is somehow associated with the national security, the government would not want it as open as other countries or the foreign investers involved too deep inside.