Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

China Mobile Ltd. (ADR) (CHL): A Smart Choice for Investors

After the announcement, China Telecom Corporation Limited (ADR) (NYSE:CHA) plans to adopt dual-mode FDD/TDD-LTE technology for its 4G deployment in China. China Telecom’s Chairman Wang Xiaoch elucidated that the dual mode will cover larger areas and expects to reach 200 million subscribers this year, up from 172 million at the end of April 2013. China Mobile is investing heavily in its 4G application network known as TD-LTE and intends to further increase the investment after receiving a 4G license this year.

Rising competition

Competition between China Mobile Ltd. (ADR) (NYSE:CHL) and its smaller competitors China Telecom Corporation Limited (ADR) (NYSE:CHA) and China Unicom is intensifying. China Unicom (Hong Kong) Limited (NYSE:CHU) is rapidly expanding its 3G market share but is still far behind China Mobile. China Unicom will expectantly snatch some 3G market share from the China Mobile due to slow connection speed. China Unicom (Hong Kong) Limited (NYSE:CHU) derives half of its revenue from a mobile service and the remaining half from fixed-line and broadband services. China Unicom uses an Internet access system based on a 4G technology called FDD-LTE. This technology is adopted by the U.S. and European telecom operators.

China Telecom is the third largest wireless operator in China. The market will definitely force China Telecom Corporation Limited (ADR) (NYSE:CHA) to offer a 4G service like China Mobile Ltd. (ADR) (NYSE:CHL), but China Telecom wants to expand its 3G Market share to recover the 100 billion yuan that it has invested in building the 3G Technology. It gained a significant market share in preceding two years.

Conclusion

The competition for China Mobile is increasing especially in the 3G market where both China Telecom Corporation Limited (ADR) (NYSE:CHA) and China Unicom (Hong Kong) Limited (NYSE:CHU) are progressing. Despite this, China Mobile has potential to grow and its early investment in the 4G Technology will surely be beneficial. I recommend investors to ‘buy’ this stock.

The article China Mobile: A Smart Choice for Investors originally appeared on Fool.com and is written by Adnan Riaz.

Adnan Riaz has no position in any stocks mentioned. The Motley Fool owns shares of China Mobile Ltd. (ADR) (NYSE:CHL). Adnan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.