SKT to acquire option on Unicom stake

21 Jun 2006

SK Telecom (SKT) has confirmed that it will buy up to USD1 billion worth of China Unicom’s bonds. SKT will have an option after one year to convert the bonds into a 6.7% stake in China’s second largest mobile operator. The move gives SKT exposure to the world’s largest and still fast-growing mobile market, while China Unicom gains an expert partner in CDMA technology; Unicom’s CDMA network is currently loss-making. However, industry analysts have suggested that the impact of the transaction is likely to be relatively small, citing the lack of any significant progress made by Vodafone and Telefónica since they acquired minor stakes in China Mobile and China Netcom respectively.

China, China Unicom, SK Telecom (SKT)