China Mobile's Class A shares (600941.SS) closed at 95.11 yuan on Friday, marking a slight decline of 0.26% for the session. The stock traded within a narrow range between 94.83 and 95.75 yuan as broader market indices also softened.
Satellite Service Rollout in Focus
State media reported that China Mobile, along with rivals China Telecom and China Unicom, has integrated a BeiDou-based satellite short messaging service. This feature, developed with state-owned China Space-Time Information, allows users on compatible phones to send and receive texts via satellite when terrestrial networks are unavailable, without needing a new SIM card. The service is positioned as a safety backup for remote areas and emergencies.
Regulatory and Tax Overhang
A separate concern for telecom operators is a recent tax reclassification. A notice from the Ministry of Finance and State Taxation Administration has shifted handset data, messaging, and broadband services—including satellite-based offerings—from "value-added" to "basic" telecommunications services. This raises the value-added tax (VAT) rate to 9% from 6%, effective January 1, 2026. China Mobile has warned the change will impact revenue and profit.
Analysis from HSBC suggests the affected segments could constitute up to half of operator revenue in 2026. The bank estimates that if only 20% of the VAT increase is passed to consumers, China Mobile's net profit could fall by approximately 6%, with steeper declines projected for China Telecom and China Unicom.
The broader market ended lower on Friday, with the Shanghai Composite Index down 0.25% to 4,065.58 and the Shenzhen Component Index falling 0.33%, contributing to a subdued finish for telecom stocks.
Investors are now assessing two key variables: whether the new satellite service can drive premium plan adoption or remains a niche safety feature, and how effectively operators can manage the impending tax burden in a competitive, regulated market. Trading attention shifts to Monday's session in Shanghai for further signals on sector performance.