Far EasTone deal canceled

AFP and Bloomberg

Fri, Apr 19, 2013 - Page 13

Far EasTone Telecommunications Co (遠傳電信) yesterday said that its 2009 agreement to sell a 12 percent stake to China Mobile Ltd (中國移動) had been terminated after failing to meet government regulations.

Far EasTone forged the NT$17.8 billion (US$529 million) deal with China Mobile, the world’s largest mobile phone operator in April 2009, pending government approval.

However, since then, little progress had been made on the agreement.

“Since some pre-conditions have not been met, the agreement is now terminated,” Far EasTone, the nation’s third-largest telecommunications carrier, said in a filing to the Taiwan Stock Exchange.

It was referring to the government’s long-standing ban on Chinese companies investing in Taiwan’s telecom sector, due to national security considerations.

“[Any] category one telecommunications business involves security issues and is more sensitive, that’s the reason why we are not considering opening it to Chinese investment,” said Emile Chang (張銘斌), deputy executive secretary of the Investment Commission at the Ministry of Economic Affairs.

“Once the ban is lifted [in the future], the two parties can again explore the possibility of the deal,” Far EasTone said, adding that the two firms had agreed to a business cooperation framework agreement.