Here are three good reasons:
China Mobile (ticker: CHL) is reportedly in talks to acquire CSL, the second largest mobile phone company in Hong Kong. Here is why the acquisition makes sense:
- The acquisition of CSL, which controls 19% of
the Hong Kong market, would quickly give China Mobile a large presence in a new market.
- Although CSL has a fraction of China Mobile's subscribers (1.5 million vs 200+ million), CSL generates significantly more revenue per customer ($34 vs $11).
- The launch
of 3G mobile phone services at the end of last year could
increase CSL's revenue per user. Customers who opt for the 3G service will have to pay more for video
and internet connections.