China Mobile: Value & Growth

China Mobile's (CHL) market valuation has declined in recent months which we believe is mostly related to general global equity market weakness and risks associated with the impending overhaul of the telecom sector by China's government. However, it remains our view that the emerging and restructured competitive entities will have unanticipated challenges deploying and advancing services to levels and coverage delivered by China Mobile, the incumbent.

Accordingly, we assess that successful expansion into low-penetration rural regions of China, along with effective network optimization strategies and customized mobile value-added services, establishes China Mobile as the dominant mobile provider, far ahead of its nearest competitors. China Mobile currently commands 70% share of the Chinese wireless market.

Regardless of additional competition, significant opportunities remain due to a substantial untapped user market, not to mention new valued-added offerings and the 3G deployments to follow. We maintain our Buy rating even as we factor in potential impacts of a competitive landscape and a comparatively weaker economy.

Anindya Barman contributed to this report.

Read the full analyst report on CHL

Read the full analyst report on CHL