China Mobile begins overseas acquisition spree

China Mobile, which generated more than $2bn in profit last year, could be about to start an overseas shopping spree, analysts predict.

The world's largest mobile phone operator's purchase of a small Pakistani operator is probably just the first of many overseas takeovers, according to analyst firm Ovum.

"In my view, this is the first strategic overseas acquisition for the world's biggest mobile operator by subscriber, and the first successful implementation of the overseas strategy Chinese operators have been pursuing to sustain continuous organic growth," said Kevin Lee, a Hong Kong-based senior analyst with Ovum.

"Having made the first foray, we expect that China Mobile will continue to look for other overseas opportunities to achieve scale in the world mobile stage and to fuel continuous growth of the group.

"The pace will accelerate once the company builds a successful blueprint in running an overseas subsidiary."

Following a number of unsuccessful bids for foreign network operators, China Mobile appears to have scored its first success by buying 88.8 per cent of Paktel.

Although Paktel was the first company to offer a modern mobile voice service in Pakistan, it is only ranked the country's fifth biggest by subscriber base.

"The acquisition also demonstrates China Mobile's strong determination in emerging markets," said Lee.

Lacking sufficient know-how to compete directly in the world's most developed countries, many Chinese companies expanding overseas have opted to cut their teeth on developing markets which have at least some degree of similarity to their home environment.