China Mobile taking over TieTong assets for USD5bn

30 Nov 2015

China Mobile’s wholly-owned ISP arm CM TieTong has entered into an agreement to purchase the assets of sister company TieTong – a wholly-owned subsidiary of China Mobile Communications Corporation (CMCC) – for CNY31.88 billion (USD4.99 billion). CM TieTong will also assume net debt of around CNY2.34 billion as part of the deal. TieTong currently owns and operates a nationwide backbone network spanning 99,000km alongside a metro cable network approximately 1.822 million km in length, and counts 11.98 million broadband customers and 18.29 million fixed line telephony subscribers. China Mobile notes that the acquisition will accelerate the company’s transformation into: ‘a fully integrated fixed-mobile operator in order to enhance the competitive strength to better compete against integrated peers in the data heavy bundled services age.’ Further, China Mobile added that the takeover would enable it to obtain a fixed broadband licence, with a view to developing smart home services. The acquisition will also greatly reduce the continuing connected transactions between China Mobile and CMCC, simplifying its management and operating structure.