Telecom firm to stay out of overseas takeovers
By Li Weitao (China Daily)Updated: 2006-12-12 08:54
China Telecommunications Corporation (China Telecom), the country's dominant fixed-line telephone carrier, will not join its domestic rivals in an overseas takeover spree, a company executive said.
"Overseas acquisitions are not a good option for fixed-line operators such as China Telecom to expand into overseas markets," Wang Xiaochu, general manager of China Telecom, told China Daily yesterday.
"Currently our top priority is to expand our customer base in overseas markets" in ways other than risky acquisitions, Wang said.
China Telecom generates overseas revenues mainly from undersea cables and connectivity services such as broadband Internet access to Chinese companies' overseas operations.
China Telecom's annual overseas turnover is expected to hit 1.2 billion yuan (US$153 million) this year, Wang said on the sidelines of a ceremony celebrating the fifth anniversary of China's accession to the World Trade Organization (WTO).
Comparable figures for past years were not available.
China Telecom Corp Ltd, the Hong Kong-listed arm of China Telecom, recorded 84.4 billion yuan (US$10.8 billion) in operating revenue in the first half of this year.
In recent years, Chinese telecoms operators have become increasingly aggressive in building a presence outside the Chinese mainland, which fuelled a mania for overseas takeovers.
Smaller fixed-line operator China Netcom bought bankrupt Asia Global Crossing (AGC) in 2003 for US$120 million plus undisclosed liabilities. Last year it also paid US$1 billion for a 20 per cent stake in Hong Kong telecoms operator PCCW Ltd.
China Mobile, the country's largest cellular operator, acquired Hong Kong's fourth-largest mobile operator China Resources Peoples Telephone Co Ltd early this year.
The firm had also been seeking to acquire Luxembourg-based Millicom, which
has networks in 16 emerging markets. The bid, estimated at US$5.3 billion,
failed in July. It would have been China's most expensive foreign takeover.
| 1 | 2 |  |
(For more biz stories, please visit Industry Updates)