Unicom to pay USD387 million for nine provincial GSM networks

21 Nov 2003

China’s second largest wireless operator China Unicom is reported to have agreed terms to buy nine mobile networks from its parent – Beijing-based China United Telecommunications Corp – for CHY3.2 billion (USD387 million) and the assumption of CHY8.1 billion of net debt. In addition, as part of the complex transaction Unicom subsidiary CUCL will sell its loss-making Guoxin nationwide paging business back to its parent for CHY2.75 billion (USD332.05 million). The combined purchase price, including cash and debt, totals USD1.36 billion, with Unicom paying 12.8 times the new networks’ forecast earnings for 2003. The new provincial networks span the less profitable regions of southern, western and northern China where mobile penetration averages at around 14.1%. China Unicom anticipates that the purchase, and sale of its unprofitable paging unit, will raise its pro forma net income by 16.8%.

China, China Unicom