Unicom Lines up Key Allies

China Unicom, the second-largest mobile operator in China, is close to finalising a strategic partnership, according to a company executive.

Speaking after a conference in Beijing, China Unicom executive director Yang Xianzu said the company's board of directors would hold a meeting next Monday to discuss inviting strategic partners.

At least two international telecommunications industry players would be selected, Mr Yang said.

He said one partner would have expertise in the mobile business and the other would have international direct dial operations.

However, Mr Yang refused to identify potential partners.

Foreign telecoms players including NTT DoCoMo, Deutsche Telekom and AT&T Wireless have been rumoured as potential strategic investors through a minority stake.

The market had been expecting China Unicom to forge a strategic partnership with international telecoms players after rival China Mobile sold US$2.5 billion worth of shares to Vodafone, the world's largest mobile player.

Mr Yang also said China Unicom aimed to inject all 18 remaining provincial mobile networks into the SAR-listed vehicle this year.

He said the injection would allow the listed company, which now operates in 12 provinces, to cover the entire China mobile market.

The injection would also help avoid competition between the parent company and the listed company, he added.

However, Mr Yang gave no details on the injection timing or valuation.

By last month China Unicom had 20 million mobile subscribers, of which about six million used the parent company's provincial networks.

With the deterioration of global telecoms stocks, analysts expected China Unicom to pay less than US$1,000 per subscriber for the parent's 18 remaining networks, costing about US$5 billion.

Analysts expected the injection to improve China Unicom's valuation by about 5 per cent.

They expected the network injection to occur in the third or fourth quarter of this year to avoid conflict with bigger rival China Telecom's share flotation in Hong Kong and New York in the middle of the year.

Shares in China Unicom dipped 20 HK cents, or 1.64 per cent, to finish at HK$12.15.








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