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Rumor: China Mobile Establishes National Handset Procurement Arm

Sina Tech, 5/27/11

An industry source said recently that China Mobile (NYSE: CHL; 0941.HK) has circulated a memo internally announcing the establishment of a terminals center, to be announced officially in August, that will operate as a national-level handset procurement subsidiary. The operator is currently making necessary internal adjustments in order to transfer staff to the new center.

The new terminals center will be operated like a division of China Mobile, overseen directly by China Mobile headquarters, and will focus on terminal procurement and sales. The center will be comprised of several departments, including products, procurement, marketing, channels, systems support, general services, and finance. While it is being referred to internally as the "mobile terminals center," externally it will operate like a company.

Previously, the source said, China Mobile's headquarters had been separate from provincial-level procurement operations, which it will now unify under the new terminals center. If a handset manufacturer is not on the center's supplier list, it will be unable to promote its handset through provincial subsidiaries.

Earlier reports claimed that China Mobile had planned to transform handset distributor Topssion, which it acquired in March, into a terminal sales subsidiary.

Editor's Note: For more information on this topic, please see "China Mobile Acquires Handset Distributor Topssion," MD 3/16/11 issue.

Keywords: M&A corporate restructuring China Mobile handset marketing procurement wireless CHL Topssion 0941.HK handset vendor distribution

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