What to do if you are the biggest player in the world’s biggest mobile market? The natural thing is not to spend $880m on a small stake in a small player in a small market.
China Mobile’s acquisition of an 18 per cent stake in Thailand’s debt-laden True Corp is strategically baffling. True is the number three player in a market with 140 per cent mobile penetration.
Yes, China Mobile needs to find growth. Its results last year were lacklustre as market share, voice revenues, margins and profits all dropped due to competition from both rival operators and internet chat services. Numbers for this year’s first quarter improved slightly but it is too early to call this a trend. Analysts are not convinced: earnings per share are expected to drop 14 per cent this year.
But there is still growth available at home. Mobile penetration is just 90 per cent, so there is a long way to go until it reaches Thailand’s level. And there are also spots of growth within the Chinese market. Revenues from wireless data rose 60 per cent last year (albeit on volumes that almost doubled) and China Mobile has a head start over rivals in 4G services.
It is not as if the company has a stellar record when it comes to overseas forays. A plan to go into Myanmar with Vodafone amounted to nothing. A three-year long attempt to buy 12 per cent of Taiwan’s Far EasTone was aborted last year.
This deal will not give China Mobile much growth either. A generous analysis says that owning the stake may teach the company how to navigate a mature market. Small investments elsewhere (why not try Africa, for instance) could add critical mass. But this deal may say more about True Corp chairman Dhanin Chearavanont’s connections in China than it does about the opportunities for mobile growth in Thailand.
现在这项交易同样不能给中国移动带来多少增长。一项持肯定态度的分析称，入股True Corp可能教给中国移动如何在一个成熟市场运作。在其他地区的小笔投资（比如说，何不试试非洲？）或许会增加临界质量。但这次入股或许更多地体现出True Corp董事长谢国民(Dhanin Chearavanont)在中国的人脉，而非反映移动业务在泰国的增长机会。