China Netcom sells Shanghai and Guangdong Telecom to parent

17 Jan 2007

China Netcom has announced it will sell its telecoms assets in Shanghai and the southern Chinese province of Guangdong to its parent, China Network Communications Group Corp, for CNY3.5 billion (USD450 million). China Netcom said in a statement that the fixed line businesses ‘have not made a significant contribution to the overall results of the group in the past financial terms’. The company added that it believes the disposal will enable the group to grasp the growth opportunities in the northern service region better. It said that it expects to book a gain of CNY711 million from the disposal, which will be used for the company’s general working capital. A number of newspapers have speculated that the sale of the assets could be viewed as a move by Netcom to streamline its businesses before the launch of 3G wireless services later this year.

China, China Netcom