China Netcom wants out of broadband joint venture with PCCW

20 Feb 2007

China Network Communications Group (China Netcom) has announced a plan to sell its 50% stake in China Netcom Broadband, its broadband internet joint venture with Hong Kong’s PCCW. According to a statement given to Beijing’s China Equity Exchange Information Centre, Netcom wants to sell the stake to a domestic investor for a reference price of CNY318 million (USD41 million). The move could be seen as a sign of cooling relations between the fixed line operator and Hong Kong’s largest telco, coming after Netcom, backed by the Chinese government, stymied an attempt to sell PCCW to overseas investors last year. Netcom is PCCW’s second largest shareholder with a 20% stake, behind its chairman Richard Li. Netcom spokesman Li Tao told Reuters that the company had already reached an agreement with PCCW on the planned stake sale in the joint venture, which exists mainly to offer broadband services in the eastern Chinese cities of Hangzhou and Ningbo, and added that the pair’s other business cooperations would not be affected.

China, China Netcom, Mid-Rivers Communications, PCCW Group