Rumor: China Mobile to Help China Telecom Pay for CDMA Network
Sina Tech, 9/25/08
According to numerous industry sources, the State-owned Assets Supervision and Administration Commission (SASAC) has resolved to directly transfer RMB 50 bln from China Mobile (NYSE: CHL; 0941.HK) to China Unicom (NYSE: CHU; 0762.HK; 600050.SH). A source at China Mobile claimed that the transfer of funds to China Unicom is mainly under the name of an inter-network settlement, and that this RMB 50 bln also includes inter-network settlement expenses for China Telecom (NYSE: CHA; 0728.HK).
An expert at the Ministry of Industry and Information Technology (MIIT)'s China Academy of Telecommunication Research (CATR) stated that this RMB 50 bln includes an allowance to help cover the purchase of Unicom's CDMA network by China Telecom, thus alleviating some of the financial pressure on China Telecom. A source at China Unicom also stated that news of the arrangement had already been announced at the company's internal meetings and that the specific reason for the decision is likely due to China Telecom not having sufficient funds to purchase Unicom's CDMA network by itself.
Keywords: restructuring 0728.HK 0762.HK 0941.HK 600050.SH CATR CDMA CHA China Mobile China Telecom China Unicom CHL CHU MIIT SASAC telecom wireless
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