China explores merger of carriers China Unicom & China Telecom
The Chinese government is exploring a merger of two of the nation’s top wireless carriers to speed up the development of 5G mobile services, Bloomberg reported on Tuesday, citing people familiar with the matter.
The merger, if it went ahead, would see state-controlled China Unicom merged with China Telecom, creating a combined carrier with a market capitalization of over $70 billion. The new firm would still lag behind larger peer China Mobile.
China is pushing to rival the United States in an arms race to dominate the next-generation 5G mobile networks, a technology seen as strategically important in both Beijing and Washington, especially amid increasing global trade tensions.
China Unicom, formally known as China United Network Communications, said it was not aware of the situation, in response to the report of a possible merger.
China Telecom referred to their response to questions about a merger at the company’s recent interim results briefing, where the firm said it had not been notified of any such plans.
Bloomberg reported that the country’s top leaders are reviewing a proposal to combine China United Network Communications Group Co (China Unicom) and China Telecommunications Corp, adding that no decision has been made and that a merger may not happen.
The two carriers between them have close to 600 million mobile subscribers as of July this year.
China Unicom and China Telecom shares jumped on Tuesday after reports of the merger. There has been speculation about the two companies being combined for several years.
Source reuters
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