It's good to see the strategy change for China Mobile

First, I didn't know if it is true or not that China Mobile is behind U.K. private equity group Terra Firma on buying the music company EMI. But at least, it shows that China Mobile is having some new thoughts on buying into the content side, instead of the old thoughts of only buying mobile carriers. That's a good thing for the mobile conglomarate, holding at least 10 billion U.S. dollars in hand, to start thinking the expansion out of mobile network.

I have argued for long that China Mobile will not have the same high profit margin as it used to be on voice usage. The central government has been pressing it to lower the calling fee, cancel the called fee and reduce the profitable roaming fee. So what will be the next profit source for China Mobile, as well as the next big good news to the stock market? Of course, it will be good to see the giant turning itself into a content producer who will connect its wide network to distribute the content. Since China Mobile doesn't own any celebrity now, it is perfect to buy a music company owning a lot of celebrities and music copyrights. We may soon expect China Mobile to stop using celebrity from other companies, and instead, using the one from EMI. (at least saving some costs)

Financing Terra Firma, a private equity, will be a smart decision since Terra knew EMI with the same country origine, and it is already a familiar idea to Chinese regulator after the country's foreign reserve firm buying into Blackstone, a U.S. private equity.

But the problem beyond this is if China Mobile is able to handle an international company since it hasn't run any worldwide business before. Also, music business is very different from the monopoly mobile business. China Mobile needs more talents to support this strategy advance.

But all in all, we expect a smooth and enjoyable music downloading process when using China mobile service.