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Technology Stocks : Vodafone-Airtouch (NYSE: VOD) -- Ignore unavailable to you. Want to Upgrade?

To: MrGreenJeans who wrote (2982)	10/4/2000 6:05:12 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 3175

Lex: Vodafone/China Mobile Published: October 4 2000 20:04GMT \| Last Updated: October 4 2000 20:08GMT The history of foreign business in China is littered with western companies that came in with high hopes and have yet to see a return on their investment. So it is well to take a hard-headed view of Vodafone's deal with China Mobile. Vodafone's $2.5bn cash buys it only about 2 per cent of the listed company - not enough for any real leverage. What Vodafone does get is a foot in the door in China and an alliance with the number two operator in the world by subscriber numbers. With 63m subscribers, China is already the second biggest mobile market, and penetration is under 5 per cent. By allying with China Mobile, which has an 83 per cent market share, Vodafone extends its lead over competitors still busy assembling European and US footprints. The memorandum of understanding is vague. But Vodafone hopes to market services, including its internet portal, to China Mobile customers and to secure preferential roaming arrangements. China Mobile should benefit from Vodafone's operational and marketing savvy. If the two can pool purchasing effectively, they will have huge influence over suppliers and new technology standards. And they could co-operate elsewhere in Asia. Vodafone hopes in time to raise its stake to a much more meaningful 15-20 per cent. China's government, though, has no desire to see Chris Gent gain any control over its country's most valuable business. Do not be surprised if Vodafone's ambitions are frustrated. But since it is buying listed securities at market prices there is little downside, and everything to play for.