China Mobile to Invest RMB 15 Bln in Tietong Next Year
CCID, 12/13/10
Zhao Jibin, VP at China Mobile (NYSE: CHL; 0941.HK), said during a recent visit to Xiamen Tietong that China Mobile will invest RMB 15 bln in its fixed-line subsidiary China Tietong next year. The funds will be used to create two broadband brands, one providing high-quality fiber optic services to high-end corporate users; the other aimed at low-end users, primarily residential subscribers.
Li Yaohua, an analyst at Ministry of Industry and Information Technology's (MIIT) China Academy of Telecommunication Research (CATR), said that China Tietong has grown from RMB 15 bln in assets when first established to RMB 50 bln in 2007 and approximately RMB 80 bln in 2010. Each year, China Tietong invests less than RMB 200 mln in China's central provinces and is falling behind in broadband deployment.
According to one source close to China Tietong, the company has been experimenting with a new management model in Guangxi province, combining Tietong technical personnel with China Mobile management and marketing staff in a new joint venture. The experiment has earned the approval of China Mobile, and could potentially be expanded nationwide.
Keywords: Li Yaohua capex corporate restructuring Zhao Jibin China Mobile China Tietong broadband CATR MIIT CHL 0941.HK investment fiber optics JV fixed-line
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