Among Asian telecom companies, China Mobile has the biggest market cap by far, a feat it accomplished by beating out mainland rivals in the race to provide high-speed 4G service.
China Mobile’s market cap stood at $225.3 billion on Friday, more than double the figure for Japan’s NTT Docomo, its closest rival. China Mobile’s market cap has grown 4% since April 6, 2012 — before 4G started gaining popularity in the mainland. China Telecom‘s market cap, meanwhile, shrank 7% while that of China United Network Communications, or China Unicom, tumbled 16% in that period.
The market has rewarded China Mobile for its robust earnings. The company posted a net profit of 108.7 billion yuan ($15.7 billion) in 2016, nearly six times the black ink at the other two providers combined, according to figures released through the end of March.
By taking the lead in establishing a 4G network and in helping customers upgrade to smartphones, China Mobile distanced itself from the competition. A public-private partnership led development of a set of 4G specifications in China. China Mobile adopted those standards and received approval to launch its service at the end of 2013.
Meanwhile, China Telecom and China Unicom adopted different standards. Because of government foot-dragging in conferring licenses, the pair faced delays in setting up base stations. At the end of last year, China Mobile boasted 535 million 4G customers — 2.4 times the combined number at the two rivals.
China Mobile’s head start in installing 4G base stations is reflected in its lead in both earnings and stock price. While the two other carriers scrambled to close the gap in 2016, China Mobile was profiting off its investments that year, said Joel Ying, analyst at Nomura Holdings’ Hong Kong arm.
The behemoth captured users of conventional cellphones by offering down-market smartphones. China Mobile was also the first to move 4G-compatible Apple devices in China, and it is aiming for supremacy in the 5G market when the technology becomes commercially available around 2020.
In order to grow earnings, China Telecom is offering data services through its fixed-wire networks. China Unicom is relying on tie-ups with online retailers.
Up in Singapore, down in India
During the five years when the market caps at Chinese telecoms either inched up or declined, many Southeast Asian providers saw their fortunes take off. Singapore Telecommunications, also known as Singtel, grew its market value 15% during that span to $45.1 billion, making it second among Asian carriers excluding Japanese players. Source: Nikkei