Cooperate on mobile service platforms and on a new mutual investment
China Unicom, a provider of fixed-line voice, broadband and other Internet-related services, and Telefonica, a provider of fixed and mobile telephony businesses, have enhanced their strategic alliance by signing an agreement to cooperate on mobile service platforms.
Under the new agreement, both the companies will cooperate in areas including: procurement, mobile service platforms, service to MNCs, wholesale carriers, roaming, and technology.
In addition, China Unicom and Telefonica have enhanced their strategic alliance with a new mutual investment pursuant to which the parties agreed to increase their respective stakes by acquiring the equivalent of $500m in the other party through the purchase of each party’s shares.
Telefonica will buy from third parties the China Unicom shares to be completed within the next nine months.
Once completed, Telefonica will increase its interest in China Unicom to 9.7%, assuming current share prices, and China Unicom will have a 1.37% stake in Telefonica.
China Unicom chairman Chang Xiaobing said both the companies have decided to enhance their strategic alliance by further investing in each other’s shares and deepening existing cooperation.
"We believe that the enhancement of strategic alliance will promote the competitive advantages of both parties and maximise shareholders’ return," Xiaobing said.