China Mobile targets cheap smartphones to boost 3G

DALIAN, China (Reuters) - China Mobile (0941.HK), the world's largest mobile carrier by subscribers, said on Friday it hoped to soon have lower-cost handsets for its 3G service, as it tries to popularize the service based on a homegrown standard.

The company aims to have handsets for its TD-SCDMA service selling for about 1,000 yuan ($146) each, versus the current 2,000 yuan to 4,000 yuan, Chairman Wang Jianzhou told reporters at the World Economic Forum in the northeast port city of Dalian.

"Our target is to have a smart phone that sells for 1,000 yuan," Wang said. "If there is such a phone, I think most people would choose it to surf the Internet."

Mobile Internet plans bundled with 3G smartphones have been one of the fastest growing sources of new revenue for most telecom operators, as the voice segment of the market becomes increasingly saturated and competitive.

China Mobile this month unveiled plans to sell 3G smartphones using a newly launched lower-cost cellphone platform called OPhone developed by California-based Marvell Technology (MRVL.O), in what it hopes will be a major advance for its 3G service.

Wang has said previously that he expects the total number of 3G-enabled phones sold by his company to more than quadruple to 200 models before the middle of next year.

China Mobile shares extended gains after Wang's comments and hit a three-week high at HK$81.45, outperforming a modest rise in the Hang Seng index .HSI.

DOMESTIC LISTING

Wang said China Mobile has begun the process for a domestic listing in China.

The Hong Kong-listed firm has said previously it would list in its home China market when the government announces new rules permitting such listings, which are now prohibited for companies like China Mobile that are technically based overseas.

Such listings are expected to be allowed as early as next year.

"In theory, there is no problem," Wang said. "China Mobile has already started the work for a domestic IPO."

A China listing would make sense for China Mobile as it is one of the country's best-known brands, and would create an opportunity for the firm in one of the world's best performing stock markets so far this year.

Wang added he was confident of closing China Mobile's previously announced plan to buy a 12 percent stake in Far EasTone (4904.TW), one of Taiwan's top three mobile carriers.

Wang's comments come as China Mobile's plan to buy the stake remains shackled by Taiwanese regulators, who continue to keep the sector out of bounds to Chinese investors.

China and Taiwan have been administered separately since the Nationalists fled the Chinese mainland after being defeated by the Communists in 1949, and elements of Taiwanese society remain deeply suspicious of any moves they feel may compromise the status quo.

"The deal has synergy and is to the mutual benefit of both sides. It is not only beneficial to both companies, but also good for consumers," Wang said.

(Writing by Doug Young and Kelvin Soh; Editing by Dhara Ranasinghe)