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May 26, 2008

Important changes are largely expected to China’s telecommunications market.

Reports of restructuring expenses sent shares of China Mobile, the world’s largest mobile phone company, down by as much as 4 percent on Friday.

As a result, many industry analysts are now predicting stiffer competition for China Mobile.

Shares in China Unicom and China Netcom were up by as much as 12 percent before the end of trading on May 23.

China’s telecom regulator has reportedly set restructuring guidelines that allow fixed-line operators to enter the mobile market.

China Mobile will now assume control over China Tietong Telecommunications, also known as China Railway Communication.

As part of the acquisition, China Mobile announced changes to its management. Former general manager of China Netcom, Zhang Chunjiang will assume the deputy general manager's duty of China Mobile and will lead the company's Party branch.

Wang Jianzhou will remain as general manager but also serve as the deputy chief of the Party branch.

Analysts speculate that this is only the beginning of the consolidation for China’s telecom market.

Moving forward, some foresee the sale of China Unicom’s mobile networks to fixed-line operators China Telecom and China Netcom.

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    This article was featured on Business 5.0.

Source: China Mobile.