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China Unicom

Speculation swirls around Citic, China Broadcasting Network as investors in Unicom’s parent

PUBLISHED : Saturday, 08 April, 2017, 12:08am
UPDATED : Saturday, 08 April, 2017, 12:47am

China Unicom saw its shares rebound on Friday after the previous day’s decline amid speculation that its 5G mobile preparations and fixed-line network business would get a big boost from two potential new investors in its parent company.

Speculation has swirled across social media on the mainland that a company under the State Administration of Radio, Film and Television (Sarft) and a domestic telecommunications network business run by conglomerate Citic Group could be involved in the mixed-ownership plan for state-controlled China United Network Communications, Unicom’s Shanghai-listed parent.

Shares of Unicom hit a 21-month-high of HK$10.96 on Friday, up 4.98 per cent from Thursday’s close of HK$10.44.

“The participation of China Broadcasting Network (CBN), a business set up by Sarft in 2014 to consolidate local cable TV networks, can add huge value if it contributes to Unicom its spectrum at 700 megahertz, a highly valuable resource for 5G,” Jefferies equity analyst Edison Lee told the South China Morning Post.

CBN was issued a national telecommunications services licence last year by the Ministry of Industry and Information Technology, covering fixed-line broadband operations.

The 90MHz of spectrum at the 700MHz band that CBN controls can be used to build future 5G outdoor coverage at a significantly lower cost than at the higher spectrum bands of 3 gigahertz to 4GHz, according to Lee.

He pointed out that Citic’s potential participation as an investor in Unicom’s parent would not be as significant.

“Citic Beijing, based on our understanding, owns a fibre-optic backbone network covering all major cities in China, but not much last-mile access,” he said. “This infrastructure overlaps with Unicom’s fixed-line network in the north, but may help its coverage in the south, where China Telecom is the incumbent.”

Earlier speculation had Baidu, Post owner Alibaba Group and Tencent Holdings as potential Unicom investors.