China Mobile makes offer for People’s Telephone

5 Oct 2005

China Mobile (Hong Kong) has made an offer to buy a 66.5% stake in Hong Kong’s fourth largest wireless operator China Resources People’s Telephone Company (People’s) for HKD2.25 billion (USD290 million); if successful it will make a general offer for the rest of the company’s shares. China Mobile (Hong Kong) is also rumoured to be planning an offer for another of the SAR’s wireless operators, most likely Telstra’s Hong Kong CSL, which would give it a much larger presence in Hong Kong, as well as a much coveted 3G licence.

China Resources People’s Telephone launched its GSM-1800 service in January 1997. It opted not to participate in the UMTS auction, citing uncertainties over funding, handset availability, a gloomy economy and technological problems. Instead it made a strategic decision to invest in EDGE technology, with rollout taking place in four phases. Phase one, completed at the end of August 2004, saw EDGE rolled out to 30% of the People’s network, including ten high traffic areas such as Central, Kowloon and Mongkok in addition to substantial parts of the mass transit railway and Kowloon-Canton railway stations; by the end of the year coverage had increased to 45% and by the end of March 2005 the company claimed rollout was essentially complete, with approximately half the population covered. Further rollout will only happen where network usage stats show it is viable.