China Mobile seeks growth via stake in Thai operator

China Mobile is expanding internationally as it struggles in its own home market

In the face of slowing growth and rising competition in its home market, China Mobile plans to take an 18 percent stake in Thailand's third largest mobile operator.

China Mobile will spend 28.6 billion Baht (US$881 million) to buy the shares in True Corporation, which has 23.1 million mobile subscribers, the two companies said Monday.

The tie-up will let the companies "explore business opportunities" in such areas as mobile banking, mobile e-commerce and market development in Thailand, China Mobile said.

China Mobile is making the deal after posting a rare decline in profits in last year's fourth quarter. The carrier has 784 million customers and just recently launched its 4G services, a business that could make gains over the long term. But it's still facing stiff competition from China's two other mobile carriers, along with mobile messaging services that are eating away at the company's revenue.

Only about 235 million of China Mobile's customers are subscribing to its faster 3G and 4G networks. The majority continue to rely on its older, slower and less-profitable mobile networks.

In addition, China's Internet companies are starting to expand into mobile phone services. E-commerce giant Alibaba Group in May began user registration for its 3G and data plans.

True Corporation, while only the third largest mobile operator in Thailand, is the sole provider of 4G services in the nation. The Thai company will use the funds from China Mobile to pay off debt, and to finance future investments. It will hold a shareholders meeting on July 25 to vote on approval of the deal.

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Tags business issuesinvestmentschina mobileTrue Corporation

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Michael Kan

IDG News Service
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