China Telecom, Unicom Disagree on CDMA Network Assets
New Express, 6/26/08
A source with knowledge of the situation has revealed that negotiations between China Telecom (NYSE: CHA; 0728.HK) and China Unicom (NYSE: CHU; 0762.HK; 600050.SH) have reached a deadlock over the demarcation of Unicom's CDMA network assets, with Unicom's dual GSM/CDMA base-stations being a major point of contention. The two parties are still debating whether Unicom's base-station assets can be shared, and also the best way to distribute China Telecom's wireless access equipment and other assets. Also, China Telecom doesn't wish to acquire assets it has no need for, such as transmission equipment, whereas Unicom would like to bundle those assets as part of the sale. The two sides also disagree over the valuation of various items.
Regarding Unicom's CDMA business, the same source revealed that the publicly listed companies of each operator had reached a consensus, valuing the business at RMB 43.8 bln, with subscribers worth RMB 39.8 bln, and the remaining RMB 4 bln accounting for base-stations under the control of the publicly listed company.
Keywords: restructuring 0728.HK 0762.HK 600050.SH CDMA CHA China Telecom China Unicom CHU GSM network telecom valuation wireless base station
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