Netcom continues pre-privatisation reshuffle

13 Jun 2003

China’s second largest fixed line operator, China Netcom Communications Group, has released a statement detailing its plans to assume full control of its subsidiary Jitong Communication Corp and merge it with the rest of the Group in preparation for an initial public offering (IPO) later this year. Netcom officials said the Group plans to pay around USD58 million for the state’s shares in Jitong and then merge its assets and staff into Netcom’s local branches. Netcom took its present form twelve months ago following a reorganisation of the Chinese telecoms market geared towards breaking up the de facto monopoly of fixed line giant China Telecom [NYSE: CHA]. In May 2002 China Telecom’s assets in ten provinces of northern China were split off and merged with those of Netcom. Last month former Chinese Minister of Information Zhang Chunjiang took over as Netcom president, a move viewed by many as a definite sign the operator is close to beginning its privatisation plans.