China Mobile is under antitrust investigation

Sales activities in four provinces sparked the probe.

credit: DFIC

China Mobile is currently under investigation in an antitrust probe for its customized 4G handsets sales in four provinces, according to a recent filing to the Hong Kong Stock Exchange.

The State Administration for Market Regulation (SAMR), which oversees enforcement of the country’s antitrust laws and regulations is “currently conducting an investigation on whether certain sales activities in respect of sales of the customized 4G+ handsets of four of the Group’s provincial subsidiaries could be anti-competitive,” the Chinese telco said in the filing.

China Mobile, the world’s largest mobile carrier, said the sales activities under scrutiny include paying subsidies to the distributors and setting sales performance targets for the handset manufacturers.

Though the company has suspended these sales activities, it could still suffer “corresponding negative effects” should SAMR choose to take actions against it, China Mobile warned investors.

The ongoing antitrust probe is the second time the Chinese mobile network giant finds itself in a government’s crosshairs in the past few weeks.

The US Federal Communication Commission (FCC) is set to block the mobile carrier from providing phone services in the US because it says China Mobile is indirectly and ultimately owned and controlled by the Chinese government.

“It is clear that China Mobile’s application to provide telecommunications services in our country raises substantial and serious national security and law enforcement risks,” FCC chairman Ajit Pai said in a draft order last month.

China Mobile recorded operating revenue of RMB 736.8 billion (USD 109.3 billion) for the 2018 financial year, up 1.8% from the previous year. As of the end of 2018, the company has 925 million network users, nearly 300 million more than its two domestic competitors, China Unicom and China Telecom, combined.