CHL vs. CHU: Market Share and Subscriber Growth (Jan '06- Jan '07)
China Mobile (CHL) and China Unicom (CHU) are the only two wireless carriers in China. The performance of their stocks is partially determined by the changes in their market share and subscriber growth.
In the table below, we compare these two carriers' total subscribers, monthly net adds, and market share, from Jan 2006 to Jan 2007. Based on the table, we can reach the following conclusions:
1. Fundamentals of China's wireless market is solid: Total subscribers increased 18.4% annually, from 376 million by the end of Jan 2006 to 445 million by the end of 2007. Wireless penetration has reached 33.0% (445 million/1,350 million) by the end of Jan 2007.
2. China Mobile dominates the wireless market in China with a 67.7% subscriber market share. Based on China's sizeable market, China Mobile is currently the largest wireless carrier in the world in terms of total subscribers (445 million) and market capitalization ($198 billion vs. No.2, Vodafone's $166 billion, as of Fri, 02/23/2007).
3. China Mobile has gained market share in the past year. China Mobile has been steadily adding subscribers at around 1.6% month-over-month growth rate, vs. the 1.0% growth rate for China Unicom. As a result, it has expanded its market share lead over China Unicom.
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