China Unicom up, down
The dual-listed China Unicom’s share performance was mixed in Shanghai and Hong Kong yesterday, which showed investors’ different views over an industry restructure plan.
China Unicom’s GSM (global system for mobile communications) business will join China Netcom. China Telecom will acquire China Unicom’s CDMA (code division multiple access) business, the South China Morning Post reported.
China Mobile will merge with fixed-line operator China Tietong in the restructuring, which is expected to occur in March or April, according to the report.
China Telecom and China Netcom are China’s top fixed-line phone operators. The restructure will help the three firms become competitive compared with China Mobile and China Unicom, the smaller of the country’s two mobile carriers, is expected to benefit from the move.
Hong Kong-listed China Unicom jumped 6.62 percent to hit $HK18.68 (US$2.40) yesterday, though the Hang Seng Index dropped 1.34 percent.
“It is possible as the regulators promised to fasten the restructure process in 2008 … the timetable will probably be set in the first half,” Chen Liang, a telecommunications analyst at Guotai Junan Securities, said in a note yesterday.
China Unicom’s Shanghai shares, however, decreased 1.17 percent to 12.68 yuan (US$1.74) while the Shanghai Composite Index grew 0.52 percent yesterday. The local China Unicom shares also surged on Thursday and have more than doubled in the past six months on the Shanghai market.
“It is another version of rumors (of an industry restructure) and we don’t take it seriously,” said Sandy Shen, an analyst at Gartner Inc, a United States-based IT research firm.
The restructure and 3G license issuances won’t happen until the end of this year, Shen said.
Chen Haofei, China International Capital Corp’s telecommunications analyst, said the restructure won’t happen in the next two quarters.
“It needs many things to prepare for the move, such as management reshuffles,” Chen said in a note delivered on Monday.
“The focus of this quarter is the annual results of the carriers.”
Tags: 3G, China-Mobile, China-Netcom, China-Telecom, China-Tietong, China-Unicom, GSM
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