China Unicom-China Telecom merger considered

Rob Powell / Telecom Ramblings
05 Sep 2018
00:00
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Forget whether three is better or worse than four, in China the question currently being debated is whether two is better or worse than three. According to the South China Morning Post, Chinese leaders are considering combining China Unicom and China Telecom.

The idea would be to accelerate 5G development and deployment, attempting to have more influence on how 5G shakes out worldwide.

The combination would put the #2 and #3 carriers and their combined 590 million subscribers under one roof, enabling a common deployment of the next generation networking platform that everyone knows is coming.

China Mobile would still be on top with 900 million subscribers of course, but such a move would certainly reduce competition within the massive Chinese market.

Those who don't follow China much should note who is said to be doing the considering. It's not China Telecom or China Unicom preparing to convince the government to let them, but rather government leaders determining whether or not to tell the two companies to merge.

The perspective is entirely different from, say, the T-Mobile/Sprint deal, and must be read in the context of the recent tug-of-war with the Trump administration over Huawei and ZTE. They want to strengthen their negotiating hand at a time they are expecting further confrontation.

With that in mind, I rather suspect the deal is already far down the path to being done and the reporting is part of the smoothing of the road - no sense spooking the markets with a surprise. So far the markets are happy with the idea, as both stocks are up in response over in Hong Kong.

This article was authored by Rob Powell and was originally posted on Telecomramblings.com

Rob Powell is founder & editor of Telecom Ramblings, which was set up in 2008. The website is dedicated to discussing trends and developments in the telecom industry.

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