China Mobile (HK) Ltd (CMHK) announced yesterday that Wang Jianzhou, former chairman and president of China Unicom Corp, will take the place of Zhang Ligui as general manager of China Mobile Corp.

Wang Xiaochu, former deputy general manager of China Mobile Group and executive director, board chairman and chief executive officer of CMHK will become the general manager of China Telecom Corp.

China Unicom said yesterday that the company will make an announcement today naming Shang Bing, vice-president of China Unicom Corp as the head of the company.

"The underlying purpose of the government is to curb irrational industry competition, thus protecting industry profitability and improving investment returns. It is definitely a positive for the industry outlook in the long run,"Goldman Sachs said in a report yesterday.

"However, we also expect execution risks and uncertainties will increase in the short term, which might arouse negative investment sentiment on Chinese telcoms."

"We believe these changes lend more credibility to the theory of a potential industry restructuring. Mergers among the key four players could be involved and could happen in the first half of 2005."

The report said it is more confident that 3G licensing may be approved in the second half of 2005, but the number of the licences is likely to be less than four as a result of the mergers.

"We believe CMHK's share price will have the biggest impact in the near-term as its CEO is perceived to have the best track record in terms of management compared to the other two operators. The impact should be less in a medium-term outlook as CMHK has the best internal control system and business model," said Credit Suisse First Boston yesterday.

(China Daily November 2, 2004)