Blackberry Mobility Featured Article

Seeking to expand into mobile financial services, China Mobile (News - Alert) Ltd., one of the world's largest mobile phone operators, with more than 527 million customers, has reportedly agreed to buy a 20 percent stake in Shanghai Pudong Development Bank Co. for $5.83 billion.

The deal paves the way for China Mobile to offer mobile payment services – which will open up a new revenue stream for the carrier.

 

'This investment is an extension of our core telecom business,” China Mobile Chairman Wang Jianzhou (News - Alert) was quoted as saying in a Walls Street Journal report. “We see big growth potential in the profitability of the mobile financial business.'

Wang said he expects the deal to boost the company’s earnings per share by 2 percent once completed.

 

The deal is still subject to approval from shareholders, the government, and relevant regulatory authorities, including the China Banking Regulatory Commission, China Securities Regulatory Commission and the State-owned Assets Supervision and Administration Commission or SASAC.

Mobile operators in Japan and South Korea already have agreements in place with banks to offer mobile payment services to their customers and these services are reportedly seeing strong adoption. For example, South Korea’s biggest telecom operator by revenue, SK Telecom (News - Alert) Co., agreed late last year to buy a 49 percent stake in the credit card unit of Hana Financial Group for $343 million, to introduce products that bundle banking and telecom services.

According to the WSJ report, China Mobile has been offering mobile payments services on a trial basis in a handful of cities in recent years.