China’s phone companies will merge into three large groups in a sweeping, long-awaited government restructuring of its giant telecommunications market that could lead to billions of dollars in new orders for foreign equipment suppliers.
A plan announced over the weekend calls for energizing competition by bringing together mobile and fixed-line operators.
It says once mergers are complete, licenses for next-generation services will be issued — a step that would require heavy spending on new equipment.
The announcement said mergers were expected to take place as quickly as possible but gave no time frame.
The plan is aimed at creating more robust competitors to China Mobile Ltd (中國移動通信), which dominates China’s market and is the world’s biggest carrier by number of subscribers, with more than 400 million accounts.
It would result in three groups based around the parent companies of China Mobile and fixed-line carriers China Telecom (中國電信) and China Netcom (中國網通).
Fixed-line carriers are struggling to attract new business at a time when first-time customers are passing up traditional service in favor of mobile phones.
China Mobile’s smaller rival, China Unicom (中國聯通), is also struggling to attract users to its network.
The merger plan highlights the communist government’s continued dominant role in the market even after an earlier restructuring that broke up China’s phone monopoly into smaller competitors.
The plan released by China’s telecoms regulator, the Ministry of Information Industry, directly applies to the state-owned parent companies of Chinese carriers. But it is expected to affect subsidiaries that have public shareholders abroad and equipment vendors such as AB LM Ericsson, Alcatel-Lucent SA, China’s Huawei Technologies Co (華為技術) and Nokia Siemens Networks, a partnership between Nokia Corp and Siemens AG.
The plan would have no direct effect on foreign carriers, which are barred from competing in China’s telecoms market.
The mergers would set in motion the awarding of licenses for third-generation (3G) service that supports wireless video, Web surfing and other services, the government statement said.
Nokia and other suppliers are anticipating billions of dollars in orders for 3G equipment.
China has the world’s biggest population of mobile phone users, with some 520 million accounts, and the government says that should reach 600 million soon.
The plan’s rollout began on Friday with the announcement that China Mobile’s parent, China Mobile Communications Corp (中國移動通信集團), will acquire China Railway Communication (鐵通), also known as Tietong.
The plan also calls for China Telecommunications Corp (中國電信集團), parent of China Telecom, China’s main fixed-line carrier, to buy a mobile network from China United Telecommunications Inc (中國聯通), Unicom’s parent company.
The rest of Unicom would be folded into Netcom’s parent, fixed-line China Network Communications Group Corp (中國網絡通信集團公司).
The remaining carrier, China Satellite Communications Corp (中國衛通) would be taken over by China Telecommunications.
COMPETITION: AMD, Intel and Qualcomm are unveiling new laptop and desktop parts in Las Vegas, arguing their technologies provide the best performance for AI workloads Advanced Micro Devices Inc (AMD), the second-biggest maker of computer processors, said its chips are to be used by Dell Technologies Inc for the first time in PCs sold to businesses. The chipmaker unveiled new processors it says would make AMD-based PCs the best at running artificial intelligence (AI) software. Dell has decided to use the chips in some of its computers aimed at business customers, AMD executives said at CES in Las Vegas on Monday. Dell’s embrace of AMD for corporate PCs — it already uses the chipmaker for consumer devices — is another blow for Intel Corp as the company
STIMULUS PLANS: An official said that China would increase funding from special treasury bonds and expand another program focused on key strategic sectors China is to sharply increase funding from ultra-long treasury bonds this year to spur business investment and consumer-boosting initiatives, a state planner official told a news conference yesterday, as Beijing cranks up fiscal stimulus to revitalize its faltering economy. Special treasury bonds would be used to fund large-scale equipment upgrades and consumer goods trade-ins, said Yuan Da (袁達), deputy secretary-general of the Chinese National Development and Reform Commission. “The size of ultra-long special government bond funds will be sharply increased this year to intensify and expand the implementation of the two new initiatives,” Yuan said. Under the program launched last year, consumers can
TECH PULL: Electronics heavyweights also attracted strong buying ahead of the CES, analysts said. Meanwhile, Asian markets were mixed amid Trump’s incoming presidency Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares yesterday closed at a new high in the wake of a rally among tech stocks on Wall Street on Friday, moving the TAIEX sharply higher by more than 600 points. TSMC, the most heavily weighted stock in the TAIEX, rose 4.65 percent to close at a new high of NT$1,125, boosting its market value to NT$29.17 trillion (US$888 billion) and contributing about 400 points to the TAIEX’s rise. The TAIEX ended up 639.41 points, or 2.79 percent, at 23,547.71. Turnover totaled NT$406.478 billion, Taiwan Stock Exchange data showed. The surge in TSMC follows a positive performance
MediaTek Inc (聯發科) yesterday said it is teaming up with Nvidia Corp to develop a new chip for artificial intelligence (AI) supercomputers that uses architecture licensed from Arm Holdings PLC. The new product is targeting AI researchers, data scientists and students rather than the mass PC market, the company said. The announcement comes as MediaTek makes efforts to add AI capabilities to its Dimensity chips for smartphones and tablets, Genio family for the Internet of Things devices, Pentonic series of smart TVs, Kompanio line of Arm-based Chromebooks, along with the Dimensity auto platform for vehicles. MeidaTek, the world’s largest chip designer for smartphones
RSS