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Rumor: China Unicom, China Telecom to Merge

Sina Tech, 2/12/15

According to a rumor on Chinese microblogging platform Weibo (Nasdaq: WB), China Telecom (NYSE: CHA; 0728.HK) and China Unicom (NYSE: CHU; 0762.HK; 600050.SH) will merge, as will China Mobile (NYSE: CHL; 0941.HK) and national cable TV operator China Radio and Television Network as part of efforts to tackle surplus capacity in the telecoms industry.

The head of China Telecom's media relations department, Song Guixiang, and a spokesperson for China Mobile both said they had no information relating to the rumor. A China Unicom spokesperson said they had heard no such news, and refused to comment further.

A source with knowledge of the situation said that the Sichuan arms of China Mobile and China Radio and Television Network had already effectively merged behind the scenes, with the service outlets of the latter effectively becoming China Mobile service outlets, and conducting very little business related to China Radio and Television Network. A source at China Mobile said that this constitutes normal cooperation procedure between the two companies, which is replicated across the country and does not signify a move towards a merger.

Editor's Note: A Ministry of Industry and Information Technology (MIIT) spokesperson confirmed to a CCTV-2 journalist that the new round of news related to a reorganization of the telecoms industry is untrue, and that there are no plans at present to reform the industry.

Keywords: Song Guixiang China Telecom China Mobile China Unicom telecom television wireless MIIT cable TV CHL 0728.HK 0762.HK 0941.HK 600050.SH CHA CHU China Radio and Television Network M&A national cable company cable operator

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The information contained in this newsletter is based upon sources that Marbridge Consulting believes to be reliable, and we have made every effort to translate the original articles or article excerpts as faithfully as possible. However, Marbridge Consulting makes no warranty of and assumes no legal responsibility for the accuracy of either the original source material or the English language translations.

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