China Mobile settles anti-trust case, more may follow

BEIJING Tue Oct 27, 2009 3:32am EDT

BEIJING Oct 27 (Reuters) - China Mobile (0941.HK), the world's largest mobile carrier, agreed to pay 1,000 yuan ($146) to a subscriber to settle a lawsuit over its mandatory fees, potentially opening the door to a flood of similar complaints.

The case, one of the first to find in favour of the plaintiff after China's landmark anti-monopoly law came into effect last year, was settled out of court on Friday, said the lawyer who filed the suit.

"This means (China Mobile) acknowledges its pricing structure has a problem," Zhou Ze, the Beijing-based lawyer, told Reuters. "Today there are many China Mobile users who want me to represent them in similar suits."

China Mobile did not respond to repeated requests for comment.

The complaint alleged that China Mobile abused its dominant position by charging high-end users who do not use pre-paid cards a 50 yuan monthly rental fee.

China Mobile has more than half a billion mobile users, commanding over 70 percent of the domestic market. It made a total of 8.4 billion yuan from monthly fees in the first half of 2009, accounting for 3.9 percent of total revenues, according to its interim report.

"The impact is minimal and we don't expect many customers will file lawsuits after this test case," said Marvin Lo, Director, Asian Equity Research at Daiwa Securities.

China Mobile shares were down 1.4 percent at 0730 GMT, while Hong Kong's China Enterprises Index .HSCE was 1 percent lower. ($=6.83 yuan) (Reporting by Joanne Chiu and Kirby Chien; Editing by Lincoln Feast)

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