China Mobile, China Telecom and China Netcom, all plan to return
to mainland stock markets seeking 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 a hundred billion
yuan to build and maintain the required new networks.
The new 3G mobile phone service will provide multimedia services
including voice, data, video and wireless Internet access.
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.
On January 3, share prices of China Mobile and China Telecom on
the Hong Kong market reached new highs of HK$71.8 (US$9.2) and
HK$4.47 (US$0.57) respectively. China Netcom's share price was also
on the rise after the New Year's Holiday.
A spokesperson for China Mobile, the largest Chinese mobile
operator, said it is the companies 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.
China Netcom Chairman, Zhang Chunjiang, has also alluded to
plans to bring the company home to stock markets here. He's also
complained about the complicated procedures involved in a red-chip
company's return to mainland browses.
Analysts say China Netcom has been in contact with stockbrokers
and is drawing up plans for an A-share market listing.
Although China Telecom has not publicly announced its plans for
going public on the Chinese market, insiders say the company is
studying proposals from investment banks to raise 40 billion yuan
(US$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. It's likely the 3G
program will be kicked off this year, imbuing the telecommunication
operators with a strong sense of urgency to finding funding
sources.
According to analysis from Goldman Sachs, a renowned US
investment bank, China Mobile is likely to be first to be listed on
the A-share market first, with China Telecom and China Netcom
following close behind.
(Xinhua News Agency January 7, 2007)