China Mobile yesterday confirmed it was in talks with Shanghai Pudong Development Bank over a potential investment in the lender, a step that could help the world's largest wireless operator expand its mobile payment services.
The confirmation of talks comes after Pudong Development's shares were suspended last Friday as the lender said it was preparing to sell stakes to strategic investors. Guotai Junan, one of China's biggest brokerages, said in a research note that Pudong Development planned to sell a 20 per cent stake to China Mobile for about Rmb40bn ($5.9bn).
Analysts said that expanding China Mobile's presence in mobile payments could be important at a time when competition in the telecoms sector is heating up. China Unicom, China Mobile's smaller rival, has recently started picking up third-generation subscribers at a faster pace as it operates a network using the mature 3GSM standard.