Rumor: China Unicom to Merge VAS Subsidiaries
Sina Tech, 11/25/10
China Unicom (NYSE: CHU; 0762.HK; 600050.SH) has begun to restructure four wireless value-added service (WVAS) subsidiaries - China Unicom Newspace, Unicom Music, Unicom Video, and Unicom Broadband Online - into two new businesses. Unicom Music will be absorbed by Guangdong Unicom's mobile music base, while Unicom Video and Unicom Newspace will be incorporated into Unicom Broadband Online. While employees at the four subsidiaries are aware of the mergers, they have yet to receive official notice.
During industry restructuring in 2008, China Unicom placed its 3G businesses, including mobile internet, mobile music, mobile video, video calling, and mobile paper, into these four subsidiaries. This caused problems as there were too many subsidiaries and none of sufficient scale. After restructuring, Unicom had fifteen direct subsidiaries, including both companies and research institutes.
Unicom Broadband Online is responsible for providing support for China Unicom's value-added services platform, including broadband internet portals, mobile WAP portals, mobile paper products and the company's national internet data center (IDC) operations. Newspace is responsible for developing internet value-added services (IVAS) with a focus on wireless value-added services. The heads of Unicom Broadband Online and Unicom Newspace are equivalent to general managers in the parent company, while the heads of Unicom Video and Unicom Music are ranked lower. In 2008, Unicom established Unicom Music and Unicom Video to develop 3G music and video content, and staffed them with general managers recruited from outside the company, not Unicom general managers.
Keywords: corporate restructuring China Unicom wireless mobile video Unicom Video video calling WVAS mobile music Unicom Music China Unicom Newspace 3G Internet Data Center IVAS 0762.HK 600050.SH CHU mobile paper mobile Internet HR
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