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.
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.
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.