China Unicom and Telefonica have signed a framework cooperation agreement on the development of 3G in the People’s Republic. The agreement aims at enhancing cooperation in the mobile communications, W-CDMA, broadband application, international business, marketing and corporate services arenas.
Telefonica’s interest in Unicom is by virtue of the Chinese company’s recent merger with China Netcom, in which the Spaniards had a 7.22% stake. In September 2008 Telefonica announced that it would boost its stake in China Netcom by 2.7% for EUR368 million, prior to Netcom merging with China Unicom. The Spanish firm subsequently purchased an additional 3.03% stake of the unified company for between EUR392 million and EUR434 million from AllianceBernstein. Telefonica now owns more than 5.5% of the combined China Unicom-China Netcom, and is the company’s single largest private investor.