China Telecom in talks with foreign companies

31 Aug 2006

According to the Financial Times, China Telecom has admitted to being in talks with five – as yet unnamed – overseas telecoms groups with a view to one of them taking a strategic stake in the company. China Telecom, the country’s largest fixed line operator, is the only one of the mainland’s ‘big-four’ telcos to have not already teamed up with a foreign company. Wang Xiaochu, chairman and chief executive, is in no hurry though, adding that a new partner would not be selected until it had been awarded a 3G licence. Although overseas companies are only allowed to take minority stakes in Chinese telcos, having a local partner could give a foreign operator better access to other telecoms projects in China. SK Telecom, South Korea’s largest cellco, this week announced the first alliance between an overseas operator and the Chinese government to help China develop its home grown 3G standard TD-SCDMA. The news came two months after SK bought bonds convertible in to a 6.7% stake in China Unicom, the country’s second-largest wireless operator. Vodafone meanwhile has a small stake in China Mobile, while China Netcom’s foreign partners are Hong Kong’s PCCW and Spain’s Telefónica.

China, China Telecom Corporation