Telecoms in China Continue to Shake Up

June 2nd, 2008

China Unicom announced two big deals today.  It actually took me a couple times to understand what happened.  To sum it up, here they are:

1. They aquired China Netcom Group Corp. Ltd, a fixed line provider, for about US$23.8 billion.
2. They would sell their CDMA mobile network and related business to China Telecom, China’s largest fixed line operator, for US$15.86 billion.

It sounds kinda weird when I first read it. I mean, why would a mobile company buy a fixed line company and sell their CDMA mobile business? (Wow that was confusing.) Almost seems like it doesn’t make much sense.

Apparently, the government demanded it. China has been demanding their big 6 telecom companies to be combined into 3 groups.

The moves were expected as part of a government-mandated shake up of China’s telecommunications sector unveiled late last month. That plan called for the country’s six telecom companies to combine into three groups in a bid to create a more competitive industry and prevent a dominant operator from monopolizing the market.

Here’s the article on yahoo.

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