China Mobile Is Growing Rural

The world's No. 1 cellular carrier is piling up customers by taking cheap handsets and pricier add-ons to Mongolia's steppes and Tibet's peaks.

by Frederik Balfour

By the time you finish reading this sentence, China Mobile (CHL) will have signed up four more subscribers. The company is adding new users at a rate of 1.8 per second, which means that the company will easily exceed 300 million subscribers by the end of the year.

Not only is China Mobile racking up customers at a turbo-charged rate, but it's adding them three times as fast as its rival China Unicom ( CHU). For the month of November, China Mobile gained 4.36 million new customers, compared to 1.56 million for Unicom. Today, its 65% share of the Chinese market has made it the world's biggest cellular carrier. It is also the biggest by market cap.

The remarkable thing is that China Mobile has sustained stellar growth even as competition in China's cities has intensified. Thanks to an aggressive expansion from the steppes of Inner Mongolia to the rugged peaks of Tibet, the company has built-up an impressive user base in rural China, which now accounts for half its new subscribers. "This is a market with huge potential," says China Mobile chief executive officer Wang Jianzhou. "In [cities] market penetration is very high. But in rural areas it is only 12%—and there are 700 million people living there."