China Mobile Ltd (中國移動) has set up a unit in Taiwan after gaining approval from the Investment Commission under the Ministry of Economic Affairs (MOEA), a move that the company said will help facilitate its proposed US$564 million investment in Far EasTone Telecommunications Co (遠傳電信).
The establishment of China Mobile’s Zong Co (縱信) unit will help “shorten the time” needed for the Chinese carrier to complete the investment in Far EasTone, according to an e-mailed statement by the Beijing-based company yesterday.
Far EasTone is the nation’s third largest mobile phone operator after Chunghwa Telecom Co (中華電信) and Taiwan Mobile Co (台灣大哥大).
China Mobile, the world’s biggest phone carrier by market value, last year agreed to pay NT$17.8 billion (US$564 million) to buy a 12 percent stake in Far EasTone. The two companies have said they are awaiting the easing of the Taiwan government’s restrictions on Chinese investment in Taiwan’s communications industry to complete the transaction.
The MOEA said in March that it would agree to China Mobile setting up a subsidiary in Taiwan to conduct wholesale trade of electronics materials. At the time, the ministry said the subsidiary would not be allowed to purchase a stake in Far EasTone, as the telecoms sector is off-limits to Chinese investors.
Meanwhile, Far EasTone plans to purchase 1.3 million to 1.5 million handsets this year, the telecom carrier said in a separate statement released yesterday.
In view of the growing popularity of smartphones among local users, Far EasTone said such models would account for up to 30 percent of its total handset purchases this year, according to the statement.
“In a slow month last month, data services still accounted for 15.2 percent of the company’s total sales last month, which indicated a high demand from smartphone users for data services,” Far EasTone said.
Far EasTone’s sales was up 6.82 percent year-on-year toNT$4.7 billion last month.
ADDITIONAL REPORTING BY KEVIN CHEN
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