Telecom developments in brief

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Includes: CHA, CHL, CHU, CN-OLD
by: Ezra Marbach

Details:


China fixed line carrier China Telecom (ticker: CHA) and mobile operator China Mobile (ticker: CHL) announced a co-operation agreement. The agreement:

  • Promotes benign competition, and prevents infrastructure duplication.
  • Calls for regular management meetings, cooperation at the provincial
    level.
  • Suggests that efforts will be made to settle outstanding disputes.

Quick thought: The agreement comes amid speculation that the Chinese
government will restructure state-owned telecom companies. It appears to be an attempt to ease government concerns about fierce competition between the four major telecoms, China Mobile, China Telecom, China Unicom (ticker: CHU) and China Netcom (ticker: CN).

The agreement is also expected to calm official fears about 3G. Some officials are concerned that granting 3G licenses to all four state-controlled operators could mean massive
overspending and burdensome competition.

More Chinese telecom developments from the China Stock Blog here.

Today's Hong Kong trading:

  • China Unicom fell 4% as investment bank Citigroup (ticker: C) cut its earnings estimates for the company for 2005 and 2006.
  • Hong
    Kong fixed-line phone operator PCCW (ticker: PCW) fell 1.8% ahead of its 2004 earnings announcement Wednesday.