“China Mobile’s total subscriber base of 123 million subscribers means Vodafone is more than 20 million subscribers behind the world’s largest mobile operator, although it is the world’s largest global investor,” said Elizabeth Hall, Senior Analyst at EMC. Vodafone managed to nudge its subscriber total to just over the 100 million mark at the end of June 2002 with 100,090,364 proportionate subscribers. The addition of China Mobile in the latest edition of the EMC World Cellular Investor Datasheet, means that 23 million subscribers separate the world’s largest mobile operator from Vodafone who positions itself as having the ‘World’s Largest Mobile Community’.

Meanwhile Deutsche Telekom is struggling to fend off the challenges from China Unicom and NTT DoCoMo for third ranked global investor. The German-based operator saw a decline of 1.5% of its proportionate subscriber base from March to June 2002 as a result of the sale of its equity holding in Indonesian operator PT Satelindo and 1.8% stake in France Telecom. China Unicom holds a 30% market share in its domestic market, but in terms of subscriber base outweighs NTT DoCoMo and is ranked fourth in the EMC World Cellular Investor spreadsheet.

Insight

China is currently the big growth story in the wireless technology industry and is likely to remain the world’s fastest growing region as macro-economic conditions in the country improve. ARPUs are lower, but so are incomes – it would be interesting to see some figures on the percentage of GDP Chinese citizens spend on wireless communications.

Vodafone is probably the only operator with sufficient scale to consider buying into the Chinese market through an acquisition of China Mobile or China Unicom. However, unless there is a dramatic change in the political climate following the expected leadership reshuffle in November, it is unlikely that the Chinese government would permit foreign ownership of such a strategic asset. The best a foreign operator could hope for is a minority stake, but this would be expensive and dillutive for the likes of Vodafone and there would be no guarantee of eventual control.