China Uni­com part­ner­ing up with Al­ibaba

China Daily (USA) - - BUSINESS - By FAN­FEIFEI fan­feifei@chi­nadaily.com.cn

China United Net­work Com­mu­ni­ca­tions Ltd said it has part­nered with in­ter­net gi­ants in a move to ar­rest its con­tin­u­ing profit de­cline and speed up its shift to­ward the mo­bile in­ter­net.

China Uni­com, the coun­try’s se­cond-big­gest tele­com car­rier, made the re­marks on Satur­day af­ter it inked a strate­gic part­ner­ship with e-com­merce gi­ant Al­ibaba Group Hold­ing Ltd to co­op­er­ate on ba­sic telecom­mu­ni­ca­tion ser­vices, mo­bile in­ter­net and in­dus­trial in­ter­net.

Wang Xiaochu, chair­man of China Uni­com, said the all-round deep co­op­er­a­tionbe­tweenChi­naUni­com and Al­ibaba has a solid foun­da­tion. Jack Ma, founder and chair­man of Al­ibaba, said he has high ex­pec­ta­tions for the co­op­er­a­tion deal.

China Uni­com also signed a strate­gic co­op­er­a­tive agree­ment with Baidu Inc onNov 2, to co­op­er­ate on projects in mo­bile in­ter­net, ar­ti­fi­cial in­tel­li­gence, big data and tele­com ser­vices.

Baidu aims to help China Uni­com put the ser­vices of its brick­sand-mor­tar out­lets and fran­chised stores on­line. China Uni­com will of­fer Baidu stronger tele­com in­fra­struc­ture sup­port, in­clud­ing in­ter­net data cen­ters and in­for­ma­tion and com­mu­ni­ca­tion tech­nol­ogy.

The co­op­er­a­tion be­tween China Uni­com and in­ter­net gi­ants comes af­ter the Na­tional Devel­op­ment and Re­form Com­mis­sion se­lected Chi­naUni­com to bea­mongthe first batch of en­ter­prises for the pi­lot mixed own­er­ship re­form.

Chi­nese lo­cal me­dia re­cently re­ported that Chi­naUni­com would likely at­tract pri­vate in­vestors to par­tic­i­pate in its re­form.

“China Uni­com has rich net­work re­sources, but it has the fewest 4G users com­pared with its ri­vals, in­clud­ing Chi­naMo­bile Com­mu­ni­ca­tions Corp and China Telecom­mu­ni­ca­tions Corp,” said Peter Liu, re­search di­rec­tor at con­sul­tancy Gart­ner Inc.

“There is an ur­gent need to find new users and data flow por­tals,” he said.

Liu said the co­op­er­a­tion was a pos­i­tive move, which would see both sides ben­e­fit­ting from each other’s strengths and would en­hance China Uni­com’s core busi­ness com­pet­i­tive­ness.

Xi­ang Li­gang, CEO of tele­com in­dus­try web­site cc­time.com, said it was an in­evitable trend that in­ter­net com­pa­nies part­nered with tele­com car­ri­ers.

“It is ex­pected that this co­op­er­a­tion will boost China Uni­com’s 4G user base,” he said.

Xi­ang said the mixed own­er­ship re­form is a very com­plex process, in­volv­ing share pur­chases and a change of op­er­a­tional modes and needed time to im­ple­ment.

An­a­lysts said China Uni­com, whose 4G sub­scribers ac­counted for 28 per­cent of China’s to­tal at the end of June, is likely to con­tinue to face heavy­mar­ket­ing costs that will weigh on prof­its.

Its 4G sub­scribers reached 72.4 mil­lion in June, up by more than 46 per­cent com­pared with the num­ber in Jan­uary, while China Mo­bile’s 4G sub­scribers were 429 mil­lion in June.

num­ber of 4G sub­scribers of China Uni­com at the end of June

LIANG SHENGJIAN / FOR CHINA DAILY

Cus­tomers try vir­tual re­al­ity de­vices at the China Uni­com stand at a tele­coms ex­hi­bi­tion in Guangzhou, Guang­dong province.

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