Even with a smooth rollout of 3G, China Mobile could have a tough time keeping revenue and earnings.

Even with a
smooth rollout of 3G, China Mobile could have a tough time keeping revenue and
earnings growing at double-digit rates. As it pushes ever deeper into the
interior, the company faces the same dilemma as the likes of Procter &
Gamble Co. and General Motors Corp.: how to win new customers without
sacrificing profit margins. Incomes in rural China average just over $400 per
year, or less than one-third what city dwellers earn. To drum up business in
places such as Dagoucun, China Mobile is cutting prices, and the amount of
money it gets from each subscriber has declined modestly
»

Even with a
smooth rollout of 3G, China Mobile could have a tough time keeping revenue and
earnings growing at double-digit rates. As it pushes ever deeper into the
interior, the company faces the same dilemma as the likes of Procter &
Gamble Co. and General Motors Corp.: how to win new customers without
sacrificing profit margins. Incomes in rural China average just over $400 per
year, or less than one-third what city dwellers earn. To drum up business in
places such as Dagoucun, China Mobile is cutting prices, and the amount of
money it gets from each subscriber has declined modestly in the past year, to
about $11. “The key is to maintain profitability even while penetrating rural areas,”
says Steve Zhang, CEO of Beijing’s AsiaInfo Holdings Inc., a telecom software
and services company that works with China Mobile

»

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