China Telecom to enter the end of February next year resolutely do not fight price war

China Telecom to enter the end of February next year resolutely do not fight price war

China Telecom (0728.HK) issued a notice yesterday, the company and the parent company China Telecom Group signed a C-Net lease agreement, from the beginning of this year to the next three years, the listed companies will be in the C net operating income of 28% of the pay rent net fee. In addition, in the CDMA lease period or after the expiration of one year, China Telecom may at any time exercise to the group to buy the right to choose. This ratio of C-net business in China Unicom Unicom red-chip company to pay the parent company Unicom Group 31% of the percentage of revenue is low 3%. Wang, China Telecom's chairman and chief executive, said yesterday that it would spend 80 billion on CDMA operations in the next 3 years, and would enter the mobile market by the end of next February.

Conditional favorable repurchase CDMA

China Telecom estimated that this year's CDMA leases will take effect from the end of this year, 2009 and 2010, the annual rental costs would be no more than 4 billion, 20 billion and 35 billion yuan.

Wang said that in accordance with the financial situation, China Telecom will consider buying back the CDMA network assets under favorable conditions.

Unicom and China Telecom have signed the agreement on the transfer of CDMA business on 27th, and the Chinese telecom eventually bought Unicom's C-Net business with the original agreement price of 110 billion yuan, of which the listed company's China Telecom H-shares acquired the C-net business price of 43.8 billion yuan, The acquisition of C-Net equipment by the parent company China Telecom Group is priced at 66.2 billion yuan.

The announcement shows that on the Unicom C network business, China Telecom will start delivery on October 1 this year, is expected to complete substantive asset delivery within two months. National Gold Securities and telecommunications analyst Chen Yunhong yesterday to reporters that China Telecom to 28% of the revenue ratio to pay rent net fee, for China Telecom is positive.

Do not fight the price war with mobile Unicom

It is revealed that China Telecom will officially enter the mobile telecommunications market by the end of February next year, marking the development of its business operators by ftns operators. China Telecom, the parent company, plans to spend 80 billion yuan in the next three years to develop the CDMA business.

Wang said yesterday that the company hopes to multiply the number of CDMA users from about 43 million to 100 million in three years, when its mobile communications market share will reach 15%. China is the world's largest mobile communications market, and the total number of mobile phone users is now more than 600 million households.

"In the future it is impossible to compete with China Mobile and unicom in the price of mobile communications services, and our goal is mainly to win high-end customers in urban areas." Wang said, "The Chinese telecom parent company will invest 80 billion yuan in the next three years to develop CDMA business, the first stage is to dial out 27.9 billion for network upgrades." ”

Wang expects China telecom to use fixed-line broadband advantage and large fixed-line users, in the last 2-3 years, so that value-added business revenue accounted for 35% of mobile communications revenue.

Return to a shares at the end of next year

Previously the industry expected China Telecom to return a A-share, because China Telecom acquisition of C net assets may be postponed. Galaxy Securities analyst Guoping yesterday, from the current C network Business operation status, he expected the C net next year will be able to achieve profitability, after the profit China Telecom will propose the acquisition of C network assets, and as a reason for "the latest next year China Telecom should return to a a-share." "The China Telecom Bulletin also mentions the repurchase of C-net equipment assets to the parent company, but there is no clear timetable." National Gold Securities analyst Chen Yunhong yesterday also said that China Telecom will be in the C net revenue balance will consider acquisition of C network equipment assets, and return to a-share market.

Yesterday China Unicom Dong Lau Jianhua told reporters that according to the agreement, Unicom will have 19,000 people will be transferred to China Telecom, mainly in China Unicom C network of some staff. Next, Unicom also sold to the C network for the global and domestic major urban roadshow, and global investors to communicate the sale of C net, for the next company held in mid-September, the general meeting of shareholders to prepare, Lau Jianhua said.

China Telecom (0728.HK) and Unicom (0762.HK) rose 0.95% to HK $4.27 and 1.04% to HK $15.48 respectively yesterday.