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China Unicom shareholders approve merger with Netcom, sale of CDMA ops UPDATE

Tue. September 16, 2008; Posted: 07:26 AM
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HONG KONG, Sep 16, 2008 (XFN-ASIA via COMTEX) -- CHU | Quote | Chart | News | PowerRating -- China Unicom shareholders approved the company's proposed merger with China Netcom under the mainland's telecom industry restructuring program.

At a special meeting today, shareholders also approved the sale of Unicom's CDMA mobile phone business to China Telecom.

After the sale, Unicom will have a single GSM-based mobile system. It will also become a full-service operator by inheriting Netcom's fixed-line phone system.

China Telecom, a fixed-line specialist, will also become a full-service operator through its purchase of the CDMA network from Unicom.

Unicom chairman Chang Xiaobing told reporters after the shareholder meeting that the company has received regulatory approval for trial runs on mobile phone number portability in Tianjin and Shenzhen.

Chang did not comment when asked whether mobile number portability will be on a one-way basis, but said he believes the program is aimed at healthy development of the industry.

Mobile number portability will allow mobile phone users to keep their numbers when switching to other providers.

Some mainland media reports have said earlier that China Mobile users will be permitted to carry the same numbers when they switch to other operators such as Unicom, but Unicom users will not be allowed to carry the same number if they switch to China Mobile.

The move was said to be intended to help the smaller players and reduce the dominance of China Mobile in mainland's telecom market.

Chang said Unicom's strategic shareholder, South Korea's SK Telecom, and Netcom investor Telefonica of Spain both supported the merger of Unicom and Netcom, and Unicom's disposal of CDMA business to China Telecom.

He also said that Lehman Brothers' bankruptcy will not affect Unicom's deal to sell the CDMA business as Lehman has already concluded its work as a financial advisor for the deal.

Chang said SK Telecom and Telefonica have not indicated any plans to buy more shares after the merger of Unicom and Netcom.

Spain's Telefonica said earlier this month that it had agreed to raise its stake in China Netcom by 5.74 pct. The Spanish firm will hold 5.5 pct in the merged entity.

Separately, Chang said the merged entity would be interested in launching the iPhone when the company gets a 3G license. He declined to comment whether Unicom is holding talks with Apple on the matter.

Chang believes the 2.5G version of the iPhone is likely be launched in China.

Media reports have said earlier that China Mobile was in advanced stage of talks regarding the launch of iPhone on the mainland.

george.ng@xfn.com

jc/rl/gn

MMMM

For full details on China Unicom Limited ADS (CHU) click here. China Unicom Limited ADS (CHU) has Short Term PowerRatings of 6. Details on China Unicom Limited ADS (CHU) Short Term PowerRatings is available at This Link.

    


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