According to published reports, China Mobile is intending to expand into the mobile phone manufacturing and distribution sector in a bid to shore up its business, planning to form a joint venture soon with several major domestic telecoms terminal maker focusing on cellphone manufacturing and distribution.

China Mobile will hold a controlling, 29% stake, with an investment of US$6.987 million, in the joint venture. Sources indicate that such domestic manufacturers as ZTE, Huawei, Eastcom, Ningbo Bird and Digital China will hold the remaining stake.

China Mobile had earlier been seen to be actively seeking more control of mobile phone sales channels and the industry chain as a whole, commencing a marketing campaign for eight cellphone models–which it asked Motorola, Nokia, Samsung, NEC and Sony Ericsson to produce–tailored to its own requirements. These requirements included functions supporting China Mobile's 10+ wireless data services–including mobile stock trading, mobile instant messaging and MMS album.

China Mobile's increasing involvement in the mobile phone manufacturing and distribution business is expected to help the operator stimulate demand for its nascent wireless data services, analysts said. However, Edward Yu, president of Beijing-based Analysys Consulting, said there is little possibility China Mobile will launch cellphones under its own brand. The sheer size of the huge domestic cellphone market makes it almost impossible for operators to launch phones under their own brands, Yu said.