China Netcom Partnerships and Deals Revealed

China Netcom has made some significant partnerships and deals that have helped shape its business and reach. One notable partnership is with China Telecom, which was formed in 2008.

This partnership has allowed China Netcom to expand its services and reach a wider customer base. The combined entity has been able to offer a more comprehensive range of services to its customers.

China Netcom has also made deals with other companies, including Huawei and ZTE, to provide equipment and services for its network.

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China Telecom and China Netcom agreed to a non-intrusion pact, where they will not try to attract business from each other's geographical territories. This means China Telecom won't try to get customers in the northern provinces, and China Netcom won't try to get customers in the southern provinces.

This agreement was likely influenced by a recent major transaction involving China Netcom, where its southern assets in Shanghai and Guangdong were in line for sale to China Telecom. The deal valued the assets at around US$452 million.

China Unicom is also involved in a major deal with China Netcom, planning to acquire the fixed-line provider in a share swap valuing the company at HK$185 billion (around $23.8 billion). This is part of a government-mandated shake up of China's telecommunications sector to create a more competitive industry.

The acquisition could help China Unicom and China Telecom compete with China Mobile, the world's largest mobile provider by subscribers. China Telecom could expand its mobile business with its current fixed-line customers, while China Unicom could grow its mobile business with new fixed-line subscribers.

Some potential foreign investors have been deterred from buying stakes in China Netcom due to regulatory uncertainty in the industry. Spain's Telefónica was the only international telecoms group that decided to invest in Netcom, signing a memorandum of understanding to form a strategic alliance and explore opportunities in China.

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Regulatory uncertainty in China's telecommunications industry has deterred potential foreign investors from buying stakes in China Netcom.

China Netcom's chief executive, Edward Tian, said that Spain's Telefónica was the only international telecoms group that had the courage to invest in Netcom.

Foreign investors were concerned about the uncertainty in the industry restructuring, according to Mr. Tian.

Telefónica has been seeking to expand into China for some time and signed a memorandum of understanding with Netcom to form a strategic alliance.

Mr. Tian denied reports that he was quitting Netcom as part of the company's reorganisation.

China Telecom and China Netcom have agreed to a non-intrusion pact, where China Telecom won't try to attract business from northern provinces, and China Netcom will respect China Telecom's southern operations.

This agreement reinforces a recent major transaction involving China Netcom, where its southern assets in Shanghai and Guangdong were in line for sale to China Telecom for around $452 million.

The two companies have a history of competition, with China Telecom's monopoly being broken up five years ago, resulting in the spin-off of China Netcom Communications Group.

The non-intrusion pact means no marketing, installing broadband, fixed line, or smartphones in each other's area, and no cultivation of major private- and public-sector entities.

This agreement could lead to more stable market share for each company and more rational competition between the two.

However, the impact on other operators and the Beijing Government's response remains to be seen.

Here are the websites of the two companies involved in the pact:

China Unicom is buying China Netcom for nearly $24 billion in a share swap, valuing the fixed-line operator at HK$185 billion, which is a 3% premium over Netcom's last closing share price.

This deal is part of a government-mandated shake up of China's telecommunications sector, which aims to create a more competitive industry and prevent a dominant operator from monopolizing the market.

The plan calls for China's six telecom companies to combine into three groups, which could help China Unicom and China Telecom compete with China Mobile, the world's largest mobile provider by subscribers.

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China Telecom could expand its new mobile business with its current fixed-line customers, while China Unicom could grow its current mobile business with the new fixed-line subscribers.

China Unicom Chairman and CEO Chang Xiaobing suggested that a close rivalry was far off, implying that the deal is just the first step in a longer process of consolidation in the industry.

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