Fitch Ratings has affirmed China Mobile Limited's (CML) Long Term Foreign Currency and Local Currency Issuer Default Rating (IDR) at 'A ' with Stable Outlook.
Fitch said that the ratings reflect CML's leading position in China's mobile market and strong financial position, but that its ratings are constrained by China's sovereign rating (A+/Stable) as CML is ultimately controlled by the state.
Without the Chinese government as a controlling shareholder, its standalone rating could be lifted to 'AA-'.
Fitch expects CML to maintain its dominant position over the medium term due to economies of scale, its robust financial position and its solid execution ability. In 2013, CML's mobile service revenue market share remained high at 69% compared with 72% in 2012. At end-February 2014, its mobile subscriber and 3G subscriber shares were 62% and 48% respectively.
The ratings agency believes that the licensing of TD-LTE based 4G technology and Apple's launch of TD-LTE-enabled iPhones will help CML make up some lost ground. CML's 3G business has been hindered by the inferiority of its TD-SCDMA 3G technology compared with its competitors' global 3G technologies. The TD-LTE ecosystem is stronger than that of TD-SCDMA, and this should strengthen CML's customer retention ability and data revenue generation.
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