China explores merger of telecoms network giants
The combination of China Unicom and China Telecom would create a carrier with more than 590 million mobile phone subscribers, a number that would be second only to China Mobile among wireless network operators worldwide
China is exploring a merger between two of the nation’s three telecommunications carriers to speed up the development of 5G mobile services amid a race with the US over the technology, according to people familiar with the matter.
The country’s top leaders are reviewing a proposal to combine China United Network Communications Group and China Telecommunications Corp, but no decision has been made and a merger may not happen, said the people, who asked not to be identified discussing a private matter.
The Hong Kong-listed vehicles of the two state-run companies, both of which trail China Mobile in scale, surged. China Unicom climbed as much as 8 per cent on Tuesday, while China Telecom rose as much as 6.4 per cent. Their combined market value increased to almost US$80 billion.
At stake is the ability to shape and control 5G, the high-speed wireless technology billed as the key to revolutionising how people use everything from smartphones and home appliances to cars.
Concerns that China could get the upper hand in 5G led to US President Donald Trump to block Broadcom’s bid to buy mobile chip maker Qualcomm, in what would have been the biggest-ever acquisition in the technology industry.