China’s telecom restructuring

Publié le par Jean Arnal


Is it the last mile? It is clear that China will not issue 3G licenses before the country' s telecom market is organized around three large telecom companies, each of them owning both fixed and mobile assets. That means merging the six state-owned carriers into three. The process could take several months (up to 18 months perhaps), but will organize the market as:

  • China Telecom acquires China Unicom' s CDMA business and China Satcom; chairman Wang Xiaochu; the deal is valued at $15.9bn; the group will control 60% fixed-line and broadband subscribers and 8% of mobile customers.

  • China Unicom will combine its GSM business with China Netcom; chairman Chang Xiaobing; the deal is valued at about $56bn; the combined group will control 30% of the fixed and broadband subscribers and 22% of mobile users.

  • China Mobile will take over China Tietong; chairman Wang Jianzhou; the group will control 70% of mobile subscribers and 5% of fixed-line and broadband internet subscribers.

Each carrier will receive a 3G license, but no details are available on timing and technology. This market shake-up will create some opportunities for foreign companies (operators and equity firms), and Chinese telecom operators are likely starting talks with foreign investors for funding their acquisition costs first but also their development plans (new networks, new markets, ..).

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