Report suggests Unicom breakup
Posted by admin on January 3rd, 2008
The official Shanghai Securities News has reported that China’s economic planning agency has proposed that fixed-line operators acquire China Unicom’s assets. This would create two entities with both mobile and fixed-line assets to challenge dominant cellular firm China Mobile.
According a report from the National Development and Reform Commission’s research bureau, the acquisition of Unicom assets by fixed-line operators China Telecom, shown in our illustration, and China Netcom is the most efficient way to restructure the telecom industry.
The report suggests, correctly, that after Unicom’s assets are distributed, the acquirers can also introduce foreign investors and raise capital to better compete with China Mobile.
The report said to facilitate the rebalancing of the industry, the two fixed-line operators should obtain mobile licenses. China Mobile can then be granted a fixed-line license when conditions are ‘right.’
The report said China Mobile must not be broken up, even though it believes China Mobile’s dominance has hindered the development of the telecom industry.
China Mobile reported nine months net profit of RMB59.88 billion, exceeding the combined profit of the other three major operators.
China Telecom and China Netcom both reported fixed-line subscriber losses in November due to falling mobile telecom service fees.
Source: CNN Money
