China Mobile to Absorb Tietong's Commercial Network Business
New Express, 11/06/08
An insider at China Tietong, which recently merged with China Mobile (NYSE: CHL; 0941.HK), has revealed that China Mobile is conducting a review of Tietong assets. The review is expected to be completed by the end of the year at the earliest. At the same time, management staff responsible for China Tietong's commercial public network will return to positions with its dedicated railway network.
An executive with China Mobile has stated that after China Tietong becomes part of China Mobile, China Mobile will increase its investment in Tietong's dedicated railway networks, and slowly extend new mobile technologies into these networks.
The executive also mentioned that for the purposes of railroad safety and security, China Tietong's dedicated railway network will always be kept as a distinctly separate subsidiary of the company rather than merging with China Mobile, and performance of company management will be judged by safety standards.
After the review of Tietong's assets is complete, China Mobile will make further adjustments to China Tietong, at first operating it independently, and then purchasing it once Tietong's financial indicators meet the requirements of China Mobile's publicly-listed company.
Editor's Note: China Mobile plans to absorb China Tietong in three stages. For more background, please see "China Tietong: Three Steps to Merger with China Mobile", MD 8/13/08 issue.
Keywords: M&A corporate restructuring 0941.HK China Mobile China Tietong CHL network railway telecom wireless
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