Chapter 3

China Mobile

The Big Bet

Listing China Telecom will be the first course of a big banquet . . . bigger courses will be served later.

—Wu Jichuan, Minister of Posts and Telecommunications (1997)1

Home to a cellular phone market approaching one billion subscriptions, the sheer numbers describing mobile phone usage in China tower above those of other national markets. In this sector of the world economy, China’s “rise” to global prominence came about more like an upward sprint. In the year 2000, China’s 85 million-strong mobile phone subscription base stood at about three-quarters the size of that of the United States (see Figure 3.1). Since then, cellular subscriptions in China have been bounding upward at a compound average growth rate (CAGR) of 26.0 percent, compared to a 9.8 percent CAGR for the United States. By 2010, China’s market was ten times larger than it was in the last year of the twentieth century. In this sector of advanced telecommunications, China now dwarfs the previously world-dominant United States by a factor of three to one. Signs indicate that plenty of additional growth lies ahead.

Figure 3.1 U.S. and China Mobile Phone Markets: Millions of Subscriptions, 2000–2010.

Source: International Telecommunications Union

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China Mobile (NYSE:CHL), first listed on the NYSE as China Telecom (Hong Kong) Ltd., dominates this massive market as China’s largest cellular ...

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