China Mobile

A day after competition regulators tossed out an inbound acquisition by the world's biggest drinks company, the world's biggest mobile phone company – China Mobile – reiterated that it is on the hunt for outbound deals.

certain bluster is forgivable. CM has yet to feel the full force of China's overhaul of its telecoms sector last May. The carrier posted its slowest annual growth in profit in more than four years on Thursday, but that was caused mainly by the cost of upgrading networks in rural areas – just 30m people, of over 1.3bn, are now out of reach. Total subscribers were up by almost a quarter last year, to 457m – equivalent to adding the population of Greater London every month.

The industry restructuring was a leg-up to the country's two fixed-line operators, China Telecom and China Unicom, which had struggled as consumers embraced wireless.

Both will start 3G services in the first half. While neither has the network quality, the distribution power or the operating efficiency to put a real dent in CM's 73 per cent share of subscribers, or 80 per cent share of revenues, the rivalry comes at a tricky time.

CM's rate of customer additions slowed by just over 10 per cent in the first two months of this year. More worryingly, a key measure of customer elasticity – the extent to which falling tariffs are offset by increased usage – more than halved over 2008.

Still, with a very lightly-geared balance sheet – 8 per cent, versus a global average of about 50 – CM is in a position of undeniable strength. Historically it has had two conditions for deals: a controlling stake, and in an emerging market. Taking 89 per cent of Pakistan's Paktel two years ago ticked both boxes. Now it has dropped the requirement for control, expect rumours of a move on South Africa's MTN to linger.