Pakistan has been the only overseas market for China Mobile since it bought Paktel Ltd, a loss-making Pakistani carrier, for $ 284 million from Millicom International Cellular SA in 2007. The company was renamed China Mobile Pakistan, or CMPak, and its services were rebranded as “Zong” in 2008.
“If we succeed (in the auction), we will provide the Pakistani people with 3G services on a Wideband Code Division Multiple Access network, as the spectrums being auctioned are suitable for WCDMA technology,” Wang said.
China Mobile’s business in Pakistan is performing well, although CMPak is still only the fifth-largest telecom operator among the six players in the market, according to the company.
“More than four years ago, when we bought Paktel, it was on the brink of bankruptcy, but now the company can generate enough cash flow to maintain its operations,” Wang said.
The Zong brand has seen the largest net growth in mobile users in Pakistan in the past three years, according to the Pakistan Telecommunications Authority. Zong had a user base of 13.2 million by October, rising from less than 1.5 million in 2007.
Earlier this month, Fan Yunjun, chief executive officer of CMPak Ltd, told the website of China Radio International that China Mobile has invested $1.5 billion in Pakistan to date.
“We have the intention to expand overseas,” Wang emphasized. The experience gained from its operations in China and Pakistan will boost the company’s confidence in stepping into other overseas markets, especially in the emerging markets.
The company is also seeking opportunities to become a minority shareholder in telecom carriers in the European or North American markets, said Wang.
“We would like to be strategic investors (in them), which will help us achieve synergies,” said Wang.
Wang said one of the advantages for China Mobile in overseas business is that its subsidiaries will be able to leverage the parent company’s economies of scale to reduce costs and maintain competitiveness.
At the end of June, the Chinese company had $58 billion in total current assets, including about 113 billion yuan in cash and cash equivalents.
“The domestic telecom market is competitive and has little room for rapid growth. The situation has pushed Chinese operators to expand overseas, especially in the emerging markets, where the market for wireless services is about to take off,” said Chen Jinqiao, a researcher with the Ministry of Industry and Information Technology.