China Unicom has signed a deal with several of the country’s major technology brands, including Tencent, Baidu and Alibaba, with overall investment of $11.7 billion (£9.1bn) coming into the operator.
A total of 10 private and state investors will purchase just over 35% of the shares of China United Network Communications (Unicom A Share Company), a listed unit, with China Unicom’s share dropping from more than 62% to 36.67% as a result.
“The businesses carried out by these strategic investors are highly correlated to and complementary with the principal businesses of Unicom A Share Company, and are expected to contribute to combining the network resources, customer resources, data operation and marketing service,” a statement read.
“Unicom A Share Company will thoroughly and strategically cooperate with those newly introduced strategic investors in the areas such as cloud computation, big data, Internet of Things, artificial intelligence, home internet, digital content, retail system, and payment finance,” it added.
In a brief statement, Baidu confirmed it was part of the share purchase agreement. “In connection with the investment, Baidu has entered into a business cooperation agreement with China Unicom,” the company said. “The investment is part of China Unicom’s mixed ownership reform pilot-run plan.”
The operator had previously denied any deal had been done with Tencent and Alibaba, following recent collaborations with the companies. Mobile World Live reported on August 7, when China Unicom announced it would set up operating centres with the two firms, that ‘despite earlier denials’ the deal “appears to confirm Alibaba and Tencent will emerge as new shareholders in the operator”, as per C114.net.
Of the three operators in China – China Telecom and Unicom for fixed line and mobile telecoms, and China Mobile for just mobile, the latter has come in for recent criticism. Last month China Mobile was downgraded by Morgan Stanley analysts, while Jefferies’ Edison Lee said the company faced a ‘dilemma’ with regard to Internet of Things standards.
You can read the full statement from China Unicom here.
Picture credit: “China Unicom” , by “Cliffano Subagio”, used under CC BY SA 2.0 / Modified from original
