China United Communications Corp., the country's second-largest telecom operator, has been granted approval to purchase a 49-percent stake in Macau's largest telecom company, Companhia de Telecomunicacoes de Macao (CTM), today's Sina.com reported.

China Unicom will soon start negotiations with TCM and may contact TCM's largest shareholder, Cable & Wireless plc, a United Kingdom-based company holding 51 percent of the shares in the Macau company.

But it is still unclear whether China Unicom will conduct the purchase via its group entity or its Hong Kong-listed unit, the Sina.com said, citing close sources to the deal.

Forty-nine percent is the cap of share purchase that China allows for its domestic telecom companies to buy into a foreign firm.

So far, neither China Unicom, CTM nor Cable & Wireless has commented on the report.
If the deal succeeds, it will signal a new step forward in business cooperation between China's mainland and Macau, analysts pointed out.

The win-win deal is also a result of the Mainland and Macao Closer Economic Partnership Arrangement (CEPA) program, which aims at promoting closer economic relationship between the two sides, they noted.

Established in 1981, CTM is a joint venture between Cable and Wireless (51 percent), Portugal Telecom International (28 percent), CITIC Pacific (20 percent) and the Macau Special Administrative Region Government (1 percent).

(Shanghai Daily November 26, 2004)