First it was TCL, then Lenovo Group, Haier and CNOOC. Now it is China's wireless giant, China Mobile, that is on an overseas shopping spree. But, like its comrades, it has run into obstacles such as pricing, unfamiliarity with local conditions and conflicts with unions. Last week, China Mobile failed in its first attempt at a big foreign acquisition - a stake of 26 per cent in the state telecommunications monopoly of Pakistan. Its bid was far behind the winner, Etisalat Telecommunications Corp of the United Arab Emirates, which put up US$2.58 billion against China Mobile's US$1.41 billion. 'China Mobile was not prepared for such a high bid,' said an Asian diplomat familiar with the negotiations. 'This shows that its experience of international competition is inadequate.' The deal for Pakistan Telecommunications Co Ltd (PTCL) was one which China Mobile should have been well placed to win. Shenzhen-based Zhongxing Telecom Equipment and Huawei Technologies are key suppliers to PTCL and Beijing has been one of Pakistan's closest allies since its independence. The market is promising, with its 150 million people having just 5.05 million fixed-line and 10.54 million mobile telephones, offering the potential of explosive growth. China Mobile, Etisalat and Singapore Telecommunications, which offered US$1.17 billion, were the only three companies to submit final bids after the government demanded a US$40 million bond, which five other contenders declined to pay. If it had won, China Mobile would have faced a situation unimaginable at home - fierce opposition from PTCL's 65,000-strong workforce. Its nine unions organised months of protests, forcing the government to order the military to take over PTCL installations to prevent workers from closing them. More than 400 union leaders and employees were arrested during the bidding process. China Mobile's next attempt is likely to be in Yemen, whose government this month invited international firms to bid for the operation of a new GSM network. Yemen has a population of 19 million and about 1.5 million mobile-phone subscribers. In terms of international operations, China Mobile has been lagging behind its domestic rivals. In January, fixed-line carrier China Netcom paid US$1 billion for a 20 per cent stake in PCCW. A month later, mobile operator China Unicom secured a licence for a CDMA service in Macau. Driving China Mobile's push abroad are the same factors spurring Haier, TCL, Lenovo and other large Chinese companies - profits at home are falling and competition is becoming more intense. In the first quarter, China Mobile's monthly average revenue per user fell to 89 yuan from 97 yuan a year earlier - due to falling call prices and a higher proportion of prepaid clients, who spend less. These smaller average phone bills meant that last year, China Mobile's sales were 50 per cent of Vodafone's despite having 62 million more subscribers than the British company, which has users from Ireland to Japan. After becoming chairman in November last year, Wang Jianzhou declared that he wanted to make China Mobile a member of the select club of global service providers and has a war chest of 50 billion yuan. 'Signs are mounting that a wave of overseas acquisitions by Chinese operators is coming,' said Chen Jinqiao, a researcher with the China Academy of Telecommunications Research under the Ministry of Information Industry, China Mobile's controlling shareholder. 'Developing countries should be the top priority for Chinese operators in their initial overseas expansion. As the world's largest mobile operator, China Mobile is fully capable of acquiring operators in countries which have a stable political environment and sound relationship with China.' For China Mobile, the most promising potential markets are in countries of South and Southeast Asia, where China enjoys good political relations. About 4 per cent of the population in India and Thailand own a mobile phone, 12 per cent in Indonesia and 37 per cent in the Philippines. India, Pakistan and Bangladesh are likely to see impressive mobile growth over the next few years. 'It's only natural that an operator as large as China Mobile will spill over its borders,' said Duncan Clark, the managing director of Beijing-based telecommunications consultancy BDA. 'But it's hard to say whether their operational experience in China has any relevance in other countries.'