China Mobile CEO Li Yue said: “We need to change the operating model of being a traditional State-owned company to help us break into new fields and create new products and services.”
Being run as a separate business would allow a mobile Internet company to compete better as it would be more responsive to changing markets and be able to overcome geographical boundaries in the domestic market, Chinadaily.com.cn reported.
The company has built nine different businesses based in various Chinese cities from 2006 – including a wireless music base in Chengdu, Sichuan province, and a mobile video base in Shanghai – to produce different types of content and develop effective individual business models.
The new mobile Internet company will be set up along the same lines as its current Internet operation, and be based in Guangzhou, according to sources at China Mobile.
Though China Mobile was a front-runner in terms of building specific business units, China Telecom, the nation’s smallest wireless operator but still its biggest fixed-line operator by revenue, has stepped up its efforts with several companies, dedicated to developing mobile Internet content.
Tv189.com, a mobile video subsidiary of China Telecom, for instance, has already attracted external investors and is estimated to be worth $305 million after becoming a standalone company in March 2011.
Meanwhile, revealing China Mobile’s plans to develop its own self-branded mobile phones, Li said he would not be looking to compete with other mobile vendors.
He took US-based Wal-Mart Stores as an example of how some companies sell other producers’ merchandise, while also providing customers with products sold under their own brand.
China Mobile announced in July that it had developed the first TD-SCDMA 3G mobile phone supporting Near Field Communication technology, or wireless communication technology with a very short range.
