Alibaba, Ten­cent want pieces of tele­com gi­ant

China Daily (Hong Kong) - - FRONT PAGE - By MA SI masi@chi­nadaily.com.cn

China United Net­work Com­mu­ni­ca­tions Group Co, the coun­try’s sec­ond-largest mo­bile car­rier by sub­scribers, has set up two op­er­at­ing centers to deepen co­op­er­a­tion with Alibaba Group Hold­ing Ltd and Ten­cent Hold­ings Ltd.

The move sig­nals that Alibaba and Ten­cent are al­most cer­tain to be­come share­hold­ers of China Uni­com, as the State-owned tele­com car­rier ac­cel­er­ates its push for mixed-own­er­ship re­form, an­a­lysts said.

Ac­cord­ing to a doc­u­ment ob­tained by China Daily, the two centers, estab­lished in Shen­zhen, Guang­dong prov­ince, and Hangzhou, Zhe­jiang prov­ince, are de­signed to ex­pand co­op­er­a­tion, re­spec­tively, with Ten­cent and Alibaba.

Su­per­vised by China Uni­com’s head­quar­ters, the two centers are en­gaged in prod­uct de­sign, event plan­ning and research and development, and other ac­tiv­i­ties which will sup­port the tele­com car­rier’s na­tion­wide co­op­er­a­tion with the two tech heavy­weights, the doc­u­ment said.

The Alibaba-ori­ented cen­ter has started with 50 em­ploy­ees, and the Ten­cent-cen­tered one starts with 34. The staff lists will be ad­justed as needed, the doc­u­ment said.

A screen cap­ture of re­cruit­ment in­for­ma­tion shows that the Ten­cent cen­ter is re­cruit­ing em­ploy­ees in­clud­ing prod­uct man­agers, de­sign­ers and engi­neers.

China Uni­com con­firmed to China Daily on Tues­day that the two op­er­at­ing centers have been estab­lished, but it de­clined to of­fer more in­for­ma­tion.

Peter Liu, research di­rec­tor at con­sul­tancy Gartner Inc, said the move sig­nals that China Uni­com is scram­bling to deepen busi­ness co­op­er­a­tion with Alibaba and Ten­cent, though de­tails on pos­si­ble cap­i­tal injection are yet to be fi­nal­ized.

“It is un­likely for China Uni­com to raise money from all big in­ter­net play­ers in China, be­cause all get­ting a foothold in a boat is equal to no one re­ally on board,” Liu said.

China Uni­com said in a fil­ing in late July that its mixed-own­er­ship re­form plan was ap­proved by the coun­try’s top eco­nomic plan­ner, the Na­tional Development and Re­form Com­mis­sion.

But the com­pany said it was still ne­go­ti­at­ing with po­ten­tial back­ers, de­spite me­dia re­ports that Alibaba and Ten­cent would team up with other big Chi­nese tech­nol­ogy firms to jointly in­vest about $12 bil­lion into its Shang­hai-listed unit.

Xiang Li­gang, chief ex­ec­u­tive of tele­com in­dus­try web­site Cc­time, said in­vest­ing in China Uni­com will give in­ter­net com­pa­nies key ac­cess to its core net­work re­sources, such as servers and band­width.

“Ten­cent and Alibaba are al­most cer­tain to be part of the re­form, for their co­op­er­a­tion is gen­er­at­ing im­pres­sive re­sults,” Xiang said.

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