Sunmmary: the issue of 3G license (news here), the immature domestic standard being assigned to CHL, and no cool handset. All the above combined with the slowdown of Chinese economy is creating a headwind for China Mobile near term growth.
China Telecom (NYSE:CHA, the landline operator recently acquired CDMA business from China Unicom) is ramping up the new CDMA + WiFi strategy, the sky wing (tian yi) plan (English:labbrand; Chinese: Hu Langlang Sina blog); I also saw the sking wing 189 promotion when I was in China. Service wise, CHA is giving the customers both broadband internet and mobile service in one package. The price is quite competitive.
To be fair, China Mobile (NYSE:CHL) is not standing still, it’s launching the 188 number with TDMA very soon. But I am seeing at least two problems: 1) Lack of WOW handset (e.g., iPhone) to attract Chinese consumers (Chinese: asun0104 blog); 2) The lag of TDMA compared to mature 3G standard WCDMA. More importantly, the existing GSM business will slowdown quite a bit as the Chinese economy in the coastal areas cools, due to slowdown in exports. As many migrant workers go back home (factories shut), there are less need for them to talk/text to family back home. Similar thing can be said to business communications.