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Chinese whispers getting louder |
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Thursday, 31 January 2008 |
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Mainland telcos look overseas for growth…
China Netcom (CNC) has officially launched China Netcom (
Japan) Operations Limited (China Netcom
Japan) in
Tokyo. The venture, which will promote international voice, data connectivity and Internet services between
China and
Japan, is indicative of renewed interest by Chinese service providers in expanding their footprints and businesses overseas. In November last year CNC launched its European Office in
London, joining operations in Hong Kong and the
USA. China Telecom, the country’s largest fixed-line operator, already has offices in Frankfurt and
London.
Chinese telco ambitions appear to extend beyond strengthening their presence in overseas enterprise markets linking back to
China. Moving on from winning an operating licence in
Macau (China Unicom) and buying into Hong Kong-listed PCCW Limited (CNC), there has been growing interest in taking strategic stakes in operators further afield. China Mobile, for example, pre-qualified in 2005 as one of eight investors seeking to acquire 26% of the shares of Pakistan Telecommunication Company Limited (PTCL), along with management control of the telco (it didn’t get the gig though). Now AFP is reporting that China Mobile is eyeing overseas acquisitions in the wake of recent falling prices in global stock markets. Also adding to the international mix, this month
Spain’s Telefónica SA reached an agreement to increase its 2.22% stake in CNC to 7.22%.
Here’s what the Ovum consultancy, in the form of a ‘EuroView Daily Comment’ service posting authored by analysts Claudio Castelli and David Molony, made of the CNC Japanese announcement. While noting that current moves to re-shuffle the composition of the national telecoms service industry could impede
China’s overseas moves, the duo reason the Japanese deal: “…marks another important step for China Netcom towards becoming a network provider with coverage in key global markets. In part, this is driven by the Chinese government's 'go global' policy. The country's rulers want Chinese companies to compete with US, Japanese and European companies.”
John Williamson |
