China's major telcos eye massive financing for 3G

08 Jan 2007
00:00

(Xinhua via NewsEdge) China Mobile, China Telecom and China Netcom, all plan to return to mainland stock markets seeking ton of fresh capital to build infrastructure to implement a new generation of mobile phone service.

With licenses for the so-called 3G mobile technology expected to be announced early this year, China's major telecommunications operators may need to quickly raise as much as 100 billion yuan ($12.8 billion) to build and maintain the required new networks.

Market watchers believe all three companies will look to domestic markets to raise the required funds.

A fourth player, China Unicom, is currently the only major telecommunication operator that is listed on both overseas and mainland stock markets.

A spokesperson for China Mobile, the largest Chinese mobile operator, said it is the company's intention to raise funds on the mainland market, but there is not a concrete timetable for an IPO.

China Mobile is listed on the Hong Kong stock market as a red-chip company, which are mainland companies registered overseas. Red-chip companies cannot directly go public on the mainland A-share market according to current Chinese regulations.

China Mobile can bypass this obstacle by setting up a new company on the mainland, analysts said.

Analysts meanwhile say China Netcom has been in contact with stockbrokers and is drawing up plans for an A-share market listing.

Insiders say China Telecom is studying proposals from investment banks to raise 40 billion yuan ($5.13 billion) by issuing A-shares in the second quarter of this year.

The Chinese government has promised that 3G service will be up and running by the 2008 Beijing Olympic Games.

© 2007 Xinhua News Agency

© 2007 Dialog, a Thomson business. All rights reserved

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