International Telecom Still has Growth Potential
Mary is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
International telecommunications is a massive growth industry. The use of mobile phones and data services is expanding even ahead of other basic utilities such as electricity. Yet still countries exist wherein owning a mobile phone is not the norm. There are a few international telecommunications providers that are striving to grow their business and reach a wider audience.
Headquartered in South Korea, SK Telecom (NYSE: SKM) is the largest telecommunications provider in Korea. They provide service to over 24 million subscribers. SK Telecom is also leading the way in 4G services. The company's efforts in innovation and education have resulted in recognition and awards from several international organizations. Their revenue grew 2% in Q1 2012. The company has a large grip on their domestic market and is currently working to expand into other markets. With the current share price this is a great value for the sheer size of the company's subscriber base. This is certainly one to watch out for as it seeks to expand its customer base across the nearby regions.
China Mobile Limited (NYSE: CHL) is another telecommunications provider to keep an eye on in Asia. China Mobile has managed to corner approximately 66% of the market in mainland China, resulting in nearly 650 million subscribers. The company operates under a lengthy list of subsidiaries and owns a large interest in a handful of other companies. China Mobile is considered one of the world's largest public companies. Whether this company is looking to move outside of China or not remains to be seen. But there is still about 34% of the Chinese market they have yet to win over. This stock does not hold the same investor value as SKM, but it does pay a 3.6% dividend. And due to China's large population there is still significant room for growth here.
Another telecommunications provider that prides itself in innovation is Russia's Mobile Telesystems (NYSE: MBT). This provider has cornered the market in Russia as well as Belarus, Armenia, Ukraine, and Uzbekistan. They are striving to be the premier telecommunications provider in Russia and the CIS. MBT is a company focused on growth in their immediate region. In addition to mobile services they also provide cable TV with the largest selection of legal content in their market. They currently lay claim to a mobile subscriber base of approximately 101 million. For the price, this company is a great value. MBT also maintains a strategic partnership with Vodafone (NASDAQ: VOD).
Vodafone is headquartered in the United Kingdom. However, it lays claim to a worldwide subscriber base of approximately 370 million customers. In addition, Vodafone provides wholesale carrier service to approximately 40 African countries. Vodafone certainly has the most globalized market share out of these countries. The company has over 10,000 Vodafone-branded stores operated through franchises and dealer arrangements. Still, for the size of this company in addition to its global customer base the company is undervalued. Also, it still has incredible room to grow and market share to gain.
Telecommunications is a big business. Even in places where most people do not have electricity they have cell phones. When it needs to be charged they simply take their phone into town and pay to use someone's electricity. However, there is still a large population out there that has not yet figured out that they can't live without a mobile phone. A majority of technological innovation that has been seen recently is in the telecommunications industry. Their is a lot of focus on it, and for good reason. Soon we will all be connected. It just remains to be seen which companies will lead the way.
MaryPosey has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend China Mobile and Vodafone Group Plc (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.
