China Mobile chairman to retire: Report

HONG KONG, CHINA: Xi Guohau, vice chairman of China Mobile Ltd, will take over as chairman of the world's largest mobile carrier by subscribers from Wang Jianzhou, who is to retire this week, local media group Caixin reported on its website on Wednesday.

Xi will be tasked with increasing China Mobile's number of high-end subscribers, possibly through a deal with Apple to carry the iPhone, and with boosting the carrier's homegrown technology which is seen as inferior to its rivals.

Shares of China Mobile, valued at $215 billion, rose 2.3 per cent on Wednesday, outperforming the Hang Seng Index's 0.2 per cent dip.

The report on Wang's retirement comes days after he appeared at a China Mobile 2011 earnings news conference in Hong Kong. Fourth-quarter net profit rose 4.6 per cent.

The market had expected Wang, 63, would step down this year, though he had given no indication of when. China Mobile executives were not immediately available for comment on the report on Wednesday.

"Xi Guohua's challenge will be to try and shift its 2G reliance to 3G using homegrown technology," said one analyst, who asked not to be named as he was not authorised to talk to the media.

"He's seen by some as being more conservative than Wang, so the question will be; how hard he will push to expand 4G deployment and a contract with Apple."

Xi, a China telecoms industry veteran, was formerly vice minister of China's Ministry of Industry and Information Technology and was a proponent of the country's proprietary TD-SCDMA technology, analysts said. That technology is a key barrier to a deal with Apple, which doesn't support it.

However, Wang said last week that technology would no longer be an issue if Apple used new chips that support TD-SCDMA in its future iPhone releases.

"The industry trend is to migrate to 3G. In that sense, China Mobile's network is an issue because they are using TD-SCDMA. And they have supply chain issues on the handsets," said Michael Meng, an analyst at BOC International. "China Telecom and China Unicom will take market share from China Mobile."

Wang, who became chairman in late 2004, led China Mobile on its first overseas acquisition, buying a majority stake in Paktel, a Pakistan telecommunications firm. In 2010, China Mobile also bought a 20 per cent stake in the Shanghai Pudong Development Bank for 39.8 billion yuan.

But China Mobile has lagged rival carriers in attracting high-end subscribers, and is the only operator among China's big three telcos without a contract to sell the iPhone.

China Mobile has 661.4 million subscribers as of February, but only 8.6 per cent of them are 3G users, compared with 22 per cent at China Unicom and 31 per cent at China Telecom Corp Ltd.