"China is the world's biggest market for telecom services," notes Geoffrey Seiler, in an in-depth review of the leading Chinese telecom and wireless phone companies.

In his BullMarket.com, he looks at "China Mobile (NYSE: CHL), China Unicom (NYSE: CHU), and China Telecom (NYSE: CHA) noting,"There is still a lot of wireless growth potential in the world's most populated country. As such, we would expect all three to continue to grow for the foreseeable future."

Seiler explains, "China Mobile is the undisputed king of mobile from a subscriber base standpoint. Through the end of June, the company boasted 493 million subscribers. The company boasts 70% of the Chinese market.

China Telecom (NYSE: CHA) is recently up $2.51 to $35.85. Chinese Premier Wen Jiabao will announce a stimulus package during his annual address to the nation's legislature on Thursday. CHA is a provider of wire line telecommunication services in China. CHA March option implied volatility is at 67; June is at 62; near its 26-week average according to Track Data, suggesting non-directional price movement.

China Mobile (NYSE: CHL) is recently up $3.17 to $44.66. CHL over all option implied volatility of 58 is near its 26-week average according to Track Data, suggesting non-directional price fluctuations.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Nippon Telephone (NYSE: NTT), a Japanese based telecommunications company, closed at $24.17 Thursday. NTT January option implied volatility of 60 is above its 26-week average of 35 according to Track Data, suggesting larger price movement.

China Telecom (NYSE: CHA), a provider of wireline telecommunication services in China, closed at $39 Thursday. Goldman Sachs has a Sell rating on CHA. CHA overall option implied volatility of 91 is above its 26-week average of 60 according to Chicago, suggesting larger price movement.

Deutsche Telekom (NYSE: DT), Europe's largest telecommunications carrier by sales, closed at $13.99 Thursday. DT January option implied volatility of 54 is above its 26-week average of 48 according to Track Data, suggesting larger price movements.

Telmex (NYSE: TMX), an operator of wireline telecommunication systems in Mexico, closed at $17.28 Thursday. TMX December option implied volatility of 66 is above its 26-week average of 49 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MAJOR PAPERS:

• Chip suppliers for cellphones including Qualcomm Incorporated (NASDAQ: QCOM), Texas Instruments Incorporated (NYSE: TXN) and Nvidia Corporation (NASDAQ: NVDA) are moving aggressively to make products for Intel Corporation's (NASDAQ: INTC) new breed of pocket-size portable devices, called MIDs, the Wall Street Journal reported.

OTHER PAPERS:

• According to the UK Times, Barclays Plc (NYSE: BCS) and The Royal Bank of Scotland Group Plc (NYSE: RBS) were raided by the Office of Fair Trading as part of the investigation into price fixing loans to professional services firms.

WEB SITES:

• Almost three dozen of the largest U.S. companies may have to slash their dividends, since the dividends greatly exceed their cash flow, Bloomberg reported. Large companies in this situation include General Motors Corporation (NYSE: GM), Motorola Inc (NYSE: MOT), and The New York Times Company (NYSE: NYT).
• China Telecom Corporation Limited (NYSE: CHA) may announce today that it has bought the mobile phone assets of China Unicom Limited (NYSE: CHU) and its parent company for more than $14.4B, Bloomberg reported, citing the South China Morning Post. China Unicom could say that it is merging with China Netcom Group Corporation (NYSE: CN) as early as today, the newspaper added.

MOST NOTEWORTHY: Banco Santander, Solera, FTI Consulting and Blue Coat Systems were today's noteworthy initiations:

• Societe Generale expects the Banco Santander's (NYSE: STD) strong organic growth in earnings to continue with the purchase of ABN Amro's (NYSE: ABN) assets in Brazil and Italy, starting shares off with a Buy rating. Shares were started at Merrill Lynch with a Neutral rating.
  
• William Blair initiated Solera Holdings (NYSE: SLH) with an Outperform rating, as they believe underlying trends for auto insurance claims are favorable.
  
• FTI Consulting (NYSE: FCN) was initiated at Deutsche Bank, as they believe the company is positioned to sustain double-digit growth, and with a Buy rating and $65 target and at Goldman with a Neutral rating and $62 target.
  
• Pacific Crest initiated Blue Coat Systems (NASDAQ: BCSI) with a Sector Perform rating on valuation and estimates fair value at $50/share.

OTHER INITIATIONS:

• BNP Paribas started shares of China Netcom (NYSE: CN) and China Telecom (NYSE: CHA) with Buy ratings and China Mobile Limited (NYSE: CHL) with a Hold rating.
  
• Cosan Limited (NYSE: CZZ) was initiated with a Neutral rating at Goldman.
  
• Methanex Corporation (NASDAQ: MEOH) was started at HSBC with an Overweight rating.

MOST NOTEWORTHY: FormFactor, Inc (FORM), Graco Inc (GGG), China Telecom (CHA), Sempra Energy (SRE) and Unica Corp (UNCA) were today's noteworthy downgrades:

• JP Morgan cut FormFactor (NASDAQ: FORM) to Underweight from Neutral citing expected competition from Micronics Japan, which has successfully ramped up production at its new advanced probe card factory.

• CIBC's checks suggest that challenges still remain in Graco's (NYSE: GGG) contractor segment and is likely to impact results, downgrading shares to Sector Performer from Sector Outperformer.

• Deutsche Bank downgraded shares of China Telecom (NYSE: CHA) to Hold from Buy to reflect slower user growth as the company added 77% fewer fixed-line customers in the first five months of 2007.

• Sempra Energy (NYSE: SRE) was cut to Outperform from its Top Pick rating at RBC Capital following the company's JV announcement with the Royal Bank of Scotland (RBSPY).

• Jefferies downgraded shares of Unica (NASDAQ: UNCA) to Hold from Buy after the company reported lower than expected Q3 licenses to reflect too much variance in execution...

OTHER DOWNGRADES:

• Linear Technology (NASDAQ: LLTC) was downgraded to Accumulate from Buy at ThinkEquity.

• Rackable Systems (NASDAQ: RACK) was downgraded to Sector Outperform at RBC Capital.

• Stanford cut Dobson (NASDAQ: DCEL) to Hold from Buy.

• Lehman assumed coverage of Extreme Networks (NASDAQ: EXTR) with an Equal Weight rating, downgrading shares from Overweight.

• Lazard downgraded First Solar (NASDAQ: FSLR) to Hold from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).