China Uni­com shares rise on mixed-own­er­ship re­form

China Daily (USA) - - BUSINESS - By MASI masi@chi­nadaily.com.cn

Shares of China United Net­work Com­mu­ni­ca­tions Lim­ited rose 5.06 per­cent on Mon­day after its State-owned par­ent com­pany con­firmed that it is con­sid­er­ing push­ing for­ward “mixed-own­er­ship re­form”.

An­a­lysts said the an­nounce­ment in­di­cates that China United Net­work Com­mu­ni­ca­tions Group Co, the coun­try’s sec­ond largest tele­com car­rier by sub­scribers, is likely to at­tract pri­vate in­vestors rather than merg­ing with its smaller ri­val, China Telecom­mu­ni­ca­tions Corp.

The Shang­hai-listed unit said in a fil­ing on Sun­day night that “its par­ent firm, China Uni­com, is work­ing on a mixed own­er­ship re­form plan”, but the coun­try's top eco­nomic plan­ner has not de­cided yet whether it will be in the first batch of pi­lot re­form pro­grams.

The move came amid ru­mors of a pos­si­ble merger be­tween China Uni­com and China Tele­com, after the two firms were left far be­hind the mar­ket leader China Mo­bile Com­mu­ni­ca­tions Corp in both the num­ber of 4G users and base sta­tions.

Xiang Li­gang, CEO of the tele­com in­dus­try web­site cc­time.com, said that the an­nounce­ment com­pletely crushed the hope of a merger be­tween the two firms, which are both State-owned.

“In­stead, it is highly likely that China Uni­com will at­tract an in­vestor from in­ter­net giants such as Ten­cent Hold­ings Ltd and Alibaba Group Hold­ings Ltd, whose business can in­ter­act with tele­com car­ri­ers’s core ser­vices,” Xiang said.

Ac­cord­ing to him, it will be a bet­ter op­tion for China Uni­com to spin off part of its business and al­low in­ter­net firms to pour money into the new ven­ture, be­cause the whole com­pany is too big.

Fu Liang, an in­de­pen­dent in­dus­try ex­pert, said China Uni­com is more likely to be cho­sen as the pi­lot firm for mixed-own­er­ship re­form than its two ri­vals, be­cause it has a tra­di­tion of part­ner­ing with pri­vate firms.

“The re­form plan, if it goes through, will boost­Chi­naUni­com’s in­no­va­tion vi­tal­ity, but it will be a very, very time-con­sum­ing process,” Fu added.

the gain in the share price of China United Net­work Com­mu­ni­ca­tions Lim­ited on Mon­day

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