China Trade Information

China Mobile (CHL) shares are down this morning on investor concerns about the impact of a new plan from China’s government to combine some smaller government-controlled telecom companies into several larger players, posing a new competitive threat for the country’s top wireless company.

Under the plan, the WSJ reports, the government “will meld six main state-owned telecom companies into three full-service carriers offering fixed-line and wireless service nationwide.”That will mean “two more robust rivals for China Mobile,”which is the world’s biggest wireless carrier, with about 400 million subscribers.

The WSJ notes that Goldman Sachs has downgraded China Mobile to Sell from Hold on the news; the paper says Goldman cautioned that the company “looks also to be heading into a uniquely unfavorable regulatory regime, with policies like inter-operator roaming seriously threatening its many advantages.”

Tags: China-Mobile, China-Telecom, telecom

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