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The issue of the 3G license (news here), the immature domestic standard being assigned to CHL, and no cool handset, combined with the slowdown of the Chinese economy, is creating a headwind for China Mobile's (NYSE:CHL) near term growth.

China Telecom (NYSE:CHA) recently acquired the CDMA business from China Unicom and is ramping up the new CDMA + WiFi strategy, the sky wing (tian yi) plan (English:labbrand; Chinese: Hu Langlang Sina blog); I also saw the sky wing 189 promotion when I was in China. Servicewise, CHA is giving customers both broadband internet and mobile service in one package. The price is quite competitive.

To be fair, China Mobile is not standing still, it’s launching the 188 number with TDMA very soon. But I am seeing at least two problems: 1) Lack of a WOW handset (e.g., iPhone) to attract Chinese consumers (Chinese: asun0104 blog); and 2) The lag of TDMA compared to mature 3G standard WCDMA. More importantly, the existing GSM business will slow quite a bit as the Chinese economy in the coastal areas cools due to a slowdown in exports. As many migrant workers go back home and factories are shut, there is less need for them to talk/text to family back home. A similar thing can be said for business communications.

Source: Tough Times in Store for China Mobile