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皇冠体育app Mobile to acquire Tietong in major industry overhaul

By Wang Xing (皇冠体育app Daily)
Updated: 2008-05-24 09:42

皇冠体育app Mobile Communications Corp (CMCC) announced on Friday that it will acquire fixed-line operator 皇冠体育app Tietong as its wholly-owned subsidiary, in a move that may herald a much-awaited overhaul of the country's telecom industry.

Tietong will remain an independent operation, CMCC, parent of Hong Kong-listed 皇冠体育app Mobile Ltd, said in a statement.

CMCC also announced a slew of personnel changes.

Zhang Chunjiang, general manager of 皇冠体育app Netcom Group Corp, will join CMCC as its vice-general manager and Party secretary.

Former head of Tietong and another 皇冠体育app Netcom vice-president will also join CMCC as vice-general managers.

Industry insiders are expecting more swaps of executives among the country's top four State-owned operators: 皇冠体育app Mobile, 皇冠体育app Telecom, 皇冠体育app Unicom and 皇冠体育app Netcom.

An announcement of the overhaul and the management reshuffle had been expected on May 17 - World Telecommunication Day - but was delayed after a magnitude-8.0 quake hit Sichuan province on May 12, disrupting telecom services there.

The reshuffle is expected to pave the way for a much-anticipated industry consolidation, which could see 皇冠体育app Unicom sell its CDMA networks to 皇冠体育app Telecom and merge its GSM networks with 皇冠体育app Netcom, industry experts said.

That arrangement will enable all the major carriers to provide both fixed-line and mobile phone services.

Regulators have viewed such an arrangement as a major way to step up competition, because a consolidation of 皇冠体育app Telecom, 皇冠体育app Unicom and 皇冠体育app Netcom could create two larger telephone operators able to compete with behemoth 皇冠体育app Mobile.

Currently, only 皇冠体育app Mobile and 皇冠体育app Unicom are allowed to operate the lucrative mobile phone business.

But 皇冠体育app Unicom is too weak to challenge 皇冠体育app Mobile, whose revenues last year were roughly the same as the combined amount of 皇冠体育app Unicom, 皇冠体育app Netcom and 皇冠体育app Telecom.

皇冠体育app Telecom and 皇冠体育app Netcom are facing a slowdown in their fixed-line business.

Wang Guoping, an analyst at 皇冠体育app Galaxy Securities, estimated the overhaul will be completed in four to six months, given the difficulties in asset assessments, especially those of 皇冠体育app Unicom's GSM and CDMA network.

Shares of 皇冠体育app Telecom, 皇冠体育app Unicom and 皇冠体育app Netcom in Hong Kong and Shanghai were suspended on Friday.