As the Chinese government pursues a
massive overhaul of the country's telecom industry, foreign-owned providers are circling, hoping to capture new contracts. The government announced a plan in May to combine the country's six main wireless providers into three companies to boost competition in the industry and give itself
better footing in the third-generation wireless services sector, which facilitates the downloading of music and video. As Money Morning reports, 3G providers such as Paris-based Alcatel-Lucent, Finland's Nokia Corp., China's Huawei Technologies Co. and Ericsson Telefon AB LM are hoping for a shot at what could be windfall profits via contracts with
China's new big three: China Telecommunications Corp. Ltd., China Network Communications Group Corp. Ltd. and China Mobile Ltd.
The restructuring is spawning many deals, including two announced Monday involving China's No. 2 wireless operator China Unicom Ltd.
China's government backed a deal for Unicom to buy fixed-line peer China Netcom Group for about $24 billion in shares. Separately, Unicom is selling the smaller of its two wireless businesses to China Telecom, the country's largest fixed-line operator, for $15.9 billion.
While the deals are meant to level the competitive field in wireless, Forbes.com
reports that Unicom and China Telecom will remain a distant second in wireless to China Mobile, which controls nearly 70% of the country's mobile market and is expected to initiate a campaign to consume even more market share.
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