It has been a difficult week for China Mobile. The operator, the world’s largest by domestic subscriber count, has been downgraded by Morgan Stanley, and Jefferies analyst Edison Lee has warned the company faces a dilemma over Internet of Things (IoT) standards.
Morgan Stanley highlighted three major concerns about China Mobile’s strategy: the cost and timing of the 5G investment cycle, rising operating expenses, and intensified competition that could erode margins. The analyst described the move to 5G as a “painful journey” for China Mobile and removed the stock from its Asia Pacific excluding Japan telecoms portfolio.
A separate report from the South China Morning Post said China Mobile may be scrambling to catch up with rivals China Unicom and China Telecom in rolling out IoT infrastructure. That follows directions from China’s Ministry of Industry and Information Technology (MIIT), which has called for an accelerated deployment of NB-IoT (NarrowBand IoT) technology and set a target of building 1.5 million NB-IoT base stations by the end of 2020.
Global operators are also experimenting with NB-IoT. Carriers such as Deutsche Telekom and Vodafone New Zealand have begun initial rollouts, showing growing industry momentum behind the technology.
Jefferies’ Edison Lee pointed out two specific technical and regulatory choices that complicate China Mobile’s IoT and network strategy. First, the operator can either wait for MIIT approval to repurpose its GSM (2G) spectrum for 4G use or proceed with upgrades on its own authority. Second, China Mobile’s 4G network uses TD-LTE (Time Division LTE), while competitors China Unicom and China Telecom rely on FDD-LTE (Frequency Division Duplex LTE). That difference in 4G standards complicates device compatibility and ecosystem alignment for IoT applications.
The company’s share price has reflected investor unease. After trading at 86.95 on June 1, China Mobile’s stock fell to a low of 80.10 on July 6 and was around 80.85 at the time this article was written.
In summary, China Mobile faces multiple near-term pressures: costly 5G rollouts, rising operating costs, competitive threats to profitability, and strategic uncertainty around IoT standards and spectrum usage. How the operator navigates regulatory approvals, technology choices and capital allocation will determine whether it can regain a stronger competitive position in China’s rapidly evolving telecom market.