The report came out this week in the Hong Kong-based newspaper South China Morning Post, frequently well informed about Chinese business and politics. Its report said, citing “people, who asked not to be identified discussing a private matter” that the Beijing government was looking at merging the two operators in order to speed up 5G development.
The Chinese government controls both operators as well as their bigger rival, China Mobile, though shares in all three are listed on the Hong Kong stock exchange. Telefónica owns 1% of China Unicom, and the two collaborate on internet of things (IoT) technology and services.
Four years ago, the Chinese government decided that the tower businesses of all three operators would be consolidated into China Tower, now the biggest such company in the world. In July China Tower raised $6.9 billion on the Hong Kong exchange, the world’s largest share flotation for two years.
According to Bloomberg Intelligence, China Mobile has 60% of the Chinese mobile market with 906 million subscribers, compared with Unicom’s 302 million and China Telecom’s 282 million – implying that even a merger of the two companies would have be only two-thirds the size of the dominant player.
However, the Chinese government has been known to move mobile business around in the past. When it merged China Netcom into China Unicom in 2008, it was forced to hand over its CDMA mobile network and customers to China Telecom.
The South China Morning Post said about the latest merger proposal: “No decision has been made and a merger may not happen.”
