China Telecom to pay $15.9 bln for CDMA
Updated: 2008-06-02 19:28
China Telecommunications Corp., the country's biggest fixed-line phone company, will pay 110 billion yuan ($15.9 billion) for part of China United Telecommunications Corp.'s mobile-phone assets in an industry revamp.
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China Telecommunications will buy China United's code- division multiple access network for 66.2 billion yuan, and will pay 43.8 billion yuan for its subscribers, the fixed-line carrier said in a statement to the Hong Kong stock exchange Monday. Trading of the company's shares, suspended in Hong Kong since May 23, will resume Tuesday, the China Telecom said.
The fixed- line company, which is losing users to China Mobile Ltd., will enter the faster-growing wireless market as the government attempts to foster greater competition.
The deals are part of the government's planned reorganization of the $105 billion telecommunications industry announced on May 24, allowing fixed-line carriers to expand into wireless services and creating three operators offering phone and Internet connections to the nation's 1.3 billion people.
China Unicom's CDMA business had a pretax profit of 1.2 billion yuan last year, compared with 1.06 billion yuan in 2006.
Meanwhile, China Unicom Ltd, the country's second biggest mobile-phone company, has formally announced a detailed merging plan with China Netcom Group Corp on Monday afternoon.
The merger through shares transfer was estimated to be around 43.91 billion HK dollars based on the stock price of China Unicom.
The two steps taken by China Unicom Monday are part of the government's proposal to reorganize the country's telecommunications industry.
Under the plan, fixed-line operator China Netcom, which dominates the northern China market, will get China Unicom's mobile network and users based on GSM technology via the merger.
China Mobile Communications Corp, the state-owned parent of China Mobile, will take control of fixed-line carrier China Tietong Telecommunications Corp, the ministry said.
After the revamp, China will issue three licenses for third-generation high-speed mobile services.
Shares of China Unicom, China Telecom and China Netcom have been suspended from trading in Hong Kong since May 23.
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