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Tough times ahead for China Mobile: I

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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.

China Telecom CHA sky wing esurf

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.

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Top 10 Chinese global brands

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Financial Times did a Top 10 Chinese global brands survey recently. And here are the winners. Did you notice anything interesting?

I noticed BoC, Air China, China Mobile, China Telecom, Sinopec, CCB are state owned (majority owned); while Lenovo, Tsingtao beer, Haier and Baidu are public companies. I am a little puzzeled why ICBC and PetroChina did not make it to the list; and I was NOT surprised Baidu tops Sina, Sohu and Netease.

By the way, many of the top 10 brands are Beijing Olympics sponsor, such as BoC, Air China, China Mobile and Lenovo. If you watch NBA on TV, you will see Lenovo and Haier ad. from time to time.

top 10 Chinese global brands
(Full size pic is here).