By Jon Bernstein, 4 October 2000 11:10
NEWS The value of the stake varies widely from report to report, between $1bn and $6.5bn. That would amount to a one to seven per cent investment in a company valued at $93bn. The potential of the Chinese mobile market is not lost on the powers that be in Japan and Europe. China Mobile's subscriber base hit 23.9 million in September, an increase of over two million in the last three months. Even this figure represents only five per cent of China's 1.2 billion population. However, John Moroney, principal consultant at Ovum, said a deal is most important to ensure European and Japanese operators can offer roaming services to their existing - richer - subscribers. He said: "As an operator you have to look at the big threats five years from now. One of these is that China takes off like a rocket and you're left with no access. That will severely damage your traveller market." Although a mobile firm doesn't need a stake in a fellow operator to secure roaming rights, Moroney said "getting into bed" with China Mobile will give any of these players an advantage. He added: "If you look at the threat of being left without a 3G licence in Europe and consider that companies are prepared to pay $8bn a shot, paying $1bn to $6bn for a company as strategic as China Mobile starts to seem sensible." Any deal would, in turn, help China Mobile fund expansion into the domestic Chinese market. The operator is looking to raise up to $30bn to fund the acquisition of seven mobile telephone networks from parent China Mobile Communications. The clearest indication yet that China's telephony powers are ready for global business came last month when China Telecom announced it would rationalise operations to make it "internationally competitive".
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