South Korean company SK Telecom Co will acquire 6.61 percent of
China Unicom Ltd by converting US$1 billion of China Unicom's bonds
into shares, its latest effort to expand in the world's largest
mobile service market.
SK Telecom will hold 899.7 million of China Unicom's shares
after the conversion, making it the second-largest shareholder in
the Chinese mobile operator, China Unicom said in a statement
yesterday.
SK Telecom will get the shares at HK$8.63 each, a 29 percent
discount on China Unicom's closing price in Hong Kong on
Monday.
"SK Telecom has good experience in 3G and value-added services,
and the investment may boost the two companies' cooperation," said
Liu Zhe, an analyst at Analysys International, a Beijing-based IT
and telecom consultancy.
SK Telecom bought the convertible bonds last June and also
established a joint venture with the Beijing-based company as part
of the deal. The venture, which provides value-added services such
as ring tones and mobile games, is seen as a test for SK Telecom in
the Chinese market.
SK Telecom plans to nominate a director to China Unicom's board,
it said yesterday. It was the world's first company to start 3G
mobile phone services in 2000. It started tests on China's
homegrown 3G standard TD-SCDMA early this year.
A Financial Times report said last week that China Unicom
may be merged with fixed-line phone operator China Telecom Corp in
the lead-up to 3G high-speed wireless services.
"The tie-up is important for SK Telecom's bid to become a
multinational mobile operator," said Liu.
SK Telecom now has more than 50 percent of the South Korean
market and is gearing up for overseas expansion in China and the
United States as further growth at home has proved difficult. The
company is reportedly planning to buy into Sprint Nextel, a mobile
company in the US.
(China Daily August 22, 2007)
