Telef\u00f3nica signs agreement with China Unicom and capture10% of world market<\/p>\n
Telef\u00f3nica has taken a decisive step towards its future strategy \u2013 to infiltrate the Chinese market. In an unprecedented strategy the Chairman of Telef\u00f3nica, C\u00e9sar Alierta, has signed an agreement with China Unicom \u2013 the second largest telecommunications operator with access to almost 55 million clients – 10% of the global market. The Alliance between the two telecommunications giants will place them at the top of the list telecommunications operators in terms of numbers of clients in the world. <\/p>\n
Telef\u00f3nica will increase its participation in China Unicom from 5.4% to 8% while the Chinese group will take on almost 1% of Telef\u00f3nica in a groundbreaking move which marks relations between Western and Chinese operators. Both moves will involve transactions worth around 1,000 million dollars (700 million euros) for each company. <\/p>\n
This move into the Chinese market is a result of efforts made by Alierta whose interest in internationalizing Telef\u00f3nica, the largest Spanish company, was also behind the purchase of O2 the British telecommunications operator. Finding a foothold in the Asian market has been one of Alierta\u2019s long term objectives. Alierta travelled to Beijing to sign the Alliance together with his Chinese counterpart, Chang Xiaobing.<\/p>\n
China is one of the largest markets for telecommunications in the world in terms of numbers of clients especially when it comes to the potential for growth \u2013 currently every six months it grows at the rate of the total population of Spain. At present only three companies operate in China: China Mobile (mobile telephones) China Telecom (fixed land lines and mobiles) and China Unicom (covers all types of telephone services). <\/p>\n
Following the signing of the agreement Alierta said that he was \u2018very happy with the alliance\u2019 and confirmed that Telef\u00f3nica\u2019s commitment was \u2018total\u2019. He added that his company would take advantage of all the synergies of this expansion to benefit both its clients and shareholders. <\/p>\n
His Chinese counterpart, Chang Xiaobing, also declared that he was \u2018very satisfied with the strengthening of relations between China Unicom and Telef\u00f3nica\u2019. He said that the increase in collaboration between the two companies would benefit both companies and contribute to improving their telecommunications services. <\/p>\n
China Unicom will take on almost 1% of Telef\u00f3nica while Telef\u00f3nica will increase its participation in the Chinese company to 8%. What is clear is that this alliance will act as a significant impulse to other joint projects already agreed between the two operators. The alliance will help many aspects of the business from extending client bases, the development mobile services, the exchange of best practices and research and development and joint cooperation in developing networks.<\/p>\n
The participation of Telef\u00f3nica in China Unicom is a result of a strategy which began four years ago when it acquired 2.99% of the capital of China Netcom. Little by little it increased its participation to 9.9% which gave it a voice in the administration of the Chinese group. However, China Netcom was absorbed by China Unicom, which lowered its Telef\u00f3nica\u2019s participation to 5%. With this new alliance Telef\u00f3nica and China Unicom have said that they will not sell their new shares for at least one year. <\/p>\n