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Chunghwa Telecom keeps close watch on Chinese mergers

Chunghwa Telecom Co (中華電信), the nation's biggest telephone company, will seek strategic partnerships with Chinese telecom operators in providing high-speed services in China after Beijing completes its recently announced consolidation plans, a company executive said yesterday.

The plan of merging China’s five major phone companies into three seeks to bring together mobile and fixed-line operators, the Ministry of Information Industry — China’s telecom regulator — said last week. Long-awaited third-generation (3G) licenses will be issued after the mergers are completed, the statement said.

“We are monitoring the restructuring,” Chunghwa Telecom Chairman Hochen Tan (賀陳旦) told reporters yesterday. “We can share 3G experience and explore market opportunities together.”

Chunghwa Telecom would aggressively seek cooperation in providing fixed and mobile integrated services for Chinese customers — especially corporate users — after the mergers are completed, Hochen said.

The company has no plan to buy shares in any Chinese telecom firms, Hochen said, citing government restrictions.

Chunghwa Telecom is scheduled to visit China Unicom Ltd (中國聯通) in the near future, Hochen said. He declined to reveal details.

Telecommunications network maker Nokia Siemens Networks also said consolidation in China’s telecom market and improving ties between Taiwan and China would create new opportunities for telecom players for cooperation and growth.

“We believe Taiwanese telecom operators do not need to look far [for growth opportunity]. China is a good market,” said David Ho (何慶源), chairman of Nokia Siemens Networks’ Greater China region operation, in Taipei.

Working together with Chinese partners, local companies would benefit from China’s 3G market of 500 million potential 3G users in the developed southeastern provinces, Ho said.

Taiwanese companies have 3G experience and lead the world in developing fixed-mobile convergence services and building next-generation networks, expertise the Chinese players would need, Ho said.

Local firms are aware of this new business opportunity, Ho said. Taiwan Mobile Co (台灣大哥大), the nation’s second-biggest phone company, spent US$5.3 billion last year buying a 5.37 percent share in Beijing-based telecom company TWM Holding Co Ltd (華友時代通信技術).

In separate news, Chunghwa Telecom said it has yet to receive further information from its biggest shareholder, the Ministry of Transportation and Communications, about a new share sale plan.

The Cabinet may propose tomorrow to sell an additional 677 million Chunghwa Telecom shares — or 7 percent of the phone company’s total 9.67 billion outstanding shares — overseas as part of its plan to raise NT$120 billion for next year, the Chinese-language Commercial Times reported.

“To do that, the government needs to lift the ceiling on foreign shareholders’ holdings first,” Hochen said.
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