Rumor: Telecom Restructuring to Result in Two Operators
China Business News, 3/04/08
Industry rumors have begun to circulate saying another proposal for restructuring of the telecom industry - the '5-into-2' plan - is under consideration. The new plan would see China Mobile (NYSE: CHL; 0941.HK) and China Tietong merging as a full-service operator named "New Mobile." This company would be given a TD-SCDMA license and, within six months to a year thereafter, a WCDMA license, and return to a mainland A-share listing. Meanwhile China Telecom (NYSE: CHA; 0728.HK), China Unicom (NYSE: CHU; 0762.HK; 600050.SH) and China Netcom (NYSE: CN; 0906.HK) would merge via an exchange of shares on the Hong Kong Stock Exchange, becoming "New Telecom" - also a full-service operator. This firm would be given WCDMA and CDMA2000 licenses, and on completion of the merger would absorb China Unicom's A-shares and then return to a mainland A-share listing via a new issue.
Although this proposal would see New Telecom end up with more users, the company would be less profitable than New Mobile and only one third of its 460 mln customers would be mobile users. Given the premium assigned to mobile users on global markets, New Mobile would still hold an advantage in terms of asset quality.
China Mobile Group president and China Mobile chairman Wang Jianzhou said yesterday that no actual proposals had been received, and that there was no timetable for a return to the mainland A-share market.
Keywords: 3G New Mobile New Telecom full-service license 0728.HK 0762.HK 0906.HK 0941.HK 600050.SH A-share CDMA2000 CHA China Mobile China Netcom China Telecom China Tietong China Unicom CHL CHU CN Hong Kong Stock Exchange license restructuring TD-SCDMA telecom timetable Wang Jianzhou WCDMA
Sending
