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Netcom Ends Peace Treaty with China Telecom

21st Century Business Herald, 11/01/07

China Netcom (NYSE: CN; 0906.HK) has revealed that there will be no renewal of its "Peace Treaty" with China Telecom (NYSE: CHA; 0728.HK), and that it is to expand its business in the 21 China Telecom-dominated southern provinces in 2008.

A China Netcom executive revealed that this is due both to slow growth in the north of China and a subsequent unwillingness to abandon the huge southern market; and a belief that a telecommunications shakeup will not take place in 2008, giving the company time to improve its position in the south.

LENS: For more background on the "Peace Treaty" between China Telecom and Netcom, please see "China Telecom and Netcom Sign "Peace Treaty"," MW 3/02/07 issue and "Xinwei Telecom Hurt by "Peace Treaty"," 3/16/07 issue.

Keywords: China Netcom CN 0906.HK China Telecom CHA 0728.HK strategy restructuring Peace Treaty telecom

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