China telecom industry's weird phenomena

 

8/24/2006，In an interview by Sohu.com, Senior engineer of policy and economics research institute in MII ,Dr. Zhu,jinzhou sum up four weird phenomena of China telecom industry.

No.1: Carriers always use "state-owned property assuring and increasing" to shield from offence.
No.2: Industry developing always sacrificed people's benifits
No.3: Domestic carriers' internet billing price is 7 times as international price
No.4: China's telecom bill is still in dystocia after 26 years.

Lucent China sues former supply chain GM

8/16/2006, Lucent China initiated court Proceeding with the case that they sue former supply chain GM, Mr. Chen,qixiong, to return 1.39million RMB personal incom tax yesterday in No.1 Middle court of SHanghai. Lucent China said in a statement they had paid more than 34 times income tax for Mr. Chen since Nov. 2005, but Mr. Chen never return any money to Lucent China.
Chen didnot appear on yesterday's court, his lawer said he didnot live in Shanghai, It was Lucent's mistake to sue him in Shanghai.He asked court to give him a 30days delay for him to prepare evidence.

Mr. Chen works for Philips China now.

Unicom's internet cafe chain running ground for unfair inter-carriers billing system

8/15/2006, According to local press, more than 2000 internet cafes belonging to China Unicom closed recently. The number amounts to 80% of the total number of Unicom's chain internet cafe. The closing of so many internet cafes means that the chian internet cafe strategy which China Unicom once expected high went bankrupt.
"It is unfair and high billing by fixed line carriers that lead to today's result." General manager of China Unicom's data and fixed line business, Mr. Zhu,shijun told the press. "We have to pay 2200RMB for each Mbps traffic to China Telecom, but we can only get 500RMB return from those franchised cafe owner. That means for each Mbps traffic, Unicom will have 1700RMB loss. Also, the price China telecom charge other customers is much lower than the price they give to us. "

China Unicom's internet cafe business began from summer of year 2004, they planned to build 2500 to 2800 franchised internet cafe around the country. Up to now, No formal feedback from China Telecom on this.

Another China Telecom/Unicom M&A rumour spreads

Another China Telecom/Unicom M&A rumour spreads
8/10/2006, Reported by Local press copied from Hongkong media, China Telecom will enter 3G mobile communication market though purchasing CDMA network from China Unicom. The news increases China Telecom's HK stock price by 4.56%. China Mobile, China Netcom and China Unicom's HK stock all increase at this news also.
The same as before, China Telecom, China Unicom, MII, SASAC(State-owned assets Supervision and Administration Commission) denied this news at once.
I donot remember how many times there is such news copied from HK media then spread through local media, some telecom analyst even think that such news is conceived by some Hongkong securities invsetors, because such news always can send those state-owned carriers' stock price higher.
Local analyst also point out that China Telecom donot have enough cash to make this purchasing.

Reasons that China Mobile renounced Millicom

Reasons that China Mobile renounced Millicom
8/8/2006， Reported by local press, In a board meeting in Beijing on July 2nd, directors of China Mobile vetoed the purchase of Millicom International Cellular S.A. ("Millicom")  finally on 5.3billion USD by China Mobile. Surprised by this result, and angried by new price talk suggested by China Mobile , Millicom then announced the end of M&A talk on the next day. Millicom announced to terminate all discussions concerning a potential sale of the entire share capital of the Company. And they pointed China Mobile would not be in a position within an acceptable timeframe to make a binding offer that was suitably attractive, given the current strong performance of the business, or sufficiently certain of closing.

About the reasons why China mobile renounced Millicom, the same article pointed out the field investigation to Millicom by China mobile was the main reason. In mid June, China Mobile send out a 15 experts group including lawer, banker and advisers, to all the countries Millisom provide service to made investigation. The group found they didnot understand Millicom at all, they even didnot know the basic information about Millicom。 Just after this investigation, China Mobile found maybe they choosed a wrong purchasing object. There will be great risks on operating in thouse countries Millicom provide services.

 

 

China Mobile will back to domestic stock market

AT&T coveting controling one mobile carrier in China
8/7/2006, President of great China area of AT&T, Mr. Li, Shengzhi told local press that AT&T will have interest on any oppunity in China telecom market.
He said:"After 22 years struggle in China market, China market has become one of the most important market on revenue increase in Asia Pacific market. In the first quarter of 2005, China market increased by 30%. Last year, AT&T also moved headquarter of great China division back to Shanghai from Hongkong. Now AT&T has more than 300 customers in China."

Li also said they would not be satisfied to just purchase some stock in second class market like Vodaphone, they want to  to be a controlling power in some Chinese mobile carrier.

China Mobile will back to domestic stock market
8/7/2006, "About go public in Domestic A stock market, We are now waiting for the approvement by CSRC(China Securites Regulatory Commission) ." One of a VP of China Mobile told local press. But he didnot say anything about the financial aim and when China Mobile can go public in A stock market.
Spokeman of China Mobile, Mr. Lei yu states that back to domestic market is a long-run process. But he denied to publish more information about this.
CEO of China mobile, Mr. Jianzhou Wang said in shareholder conference this may that he hopes China Mobile can go back to A stock market. Persons who are close to China Mobile think that no evidence show that this process can be launched right now, it need to wait CSRS's further suggestion.