After $125 Billion Drop, China Mobile Recovery May Be Far Away
- Tariff cuts, competition may stifle profit as 5G capex looms
- Massive subscriber base making it harder for carrier to expand
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By some measures, China Mobile Ltd. looks cheap. Shares of the world’s largest mobile carrier trade at almost one-third of global peers’ valuation.
But don’t be tempted, say some analysts and investors, as a strong rebound is not yet on the horizon. The carrier has limited growth potential, while bearing the brunt of Chinese government pressure to reduce rates. Also, costs loom for upgrading its network to 5G and on Monday, the Trump administration asked the Commerce Department to block its 2011 application to set up a business in the U.S.