Following China Mobile's (NYSE: CHL; 0941.HK) release last week of its 2007 report, Deutsche Bank analysts met with senior China Mobile executives to discuss core strategic issues for the company. After the meeting, Deutsche Bank issued a report saying that the company's initial sales target of 500,000 TD-SCDMA handsets has been lowered to 300,000, a decision based on surveys conducted by China Mobile's marketing team in provincial-level cities. The report predicted that 1/3 of the company's TD-SCDMA handsets will be provided under a model that will provide the phones and the service for free, and that the other 2/3 will use a model under which users pay for handsets but receive service for free. According to the report, this stage will continue for three months, after which China Mobile will submit a feedback report on TD-SCDMA to governmental bodies.

Deutsche Bank predicts that TD-SCDMA testing will once again be extended, and that leaders of the newly established central-government bodies will adopt a gradual policy towards TD-SCDMA.