Chinesepod - SK Telecom buys stake in China Unicom

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BIZCHINA / Photo

SK Telecom buys stake in China Unicom

By Wang Xu (China Daily)
Updated: 2007-08-22 09:19

A man charges his cellphone at a self-service booth of China Unicom Ltd
in Shanghai.[newsphoto]?

South Korean company SK Telecom Co will acquire 6.61 percent of China
Unicom Ltd by converting $1 billion of China Unicom's bonds into shares,
its latest effort to expand in the world's largest mobile service market.

SK Telecom will hold 899.7 million of China Unicom's shares after the
conversion, making it the second-largest shareholder in the Chinese
mobile operator, China Unicom said in a statement yesterday.

SK Telecom will get the shares at HK$8.63 each, a 29 percent discount on
China Unicom's closing price in Hong Kong on Monday.

"SK Telecom has good experience in 3G and value-added services, and the
investment may boost the two companies' cooperation," said Liu Zhe, an
analyst at Analysys International, a Beijing-based IT and telecom
consultancy.

SK Telecom bought the convertible bonds last June and also established a
joint venture with the Beijing-based company as part of the deal. The
venture, which provides value-added services such as ring tones and
mobile games, is seen as a test for SK Telecom in the Chinese market.

SK Telecom plans to nominate a director to China Unicom's board, it said
yesterday. It was the world's first company to start 3G mobile phone
services in 2000. It started tests on China's homegrown 3G standard
TD-SCDMA early this year.

A Financial Times report said last week that China Unicom may be merged
with fixed-line phone operator China Telecom Corp in the lead-up to 3G
high-speed wireless services.

"The tie-up is important for SK Telecom's bid to become a multinational
mobile operator," said Liu.

SK Telecom now has more than 50 percent of the South Korean market and is
gearing up for overseas expansion in China and the United States as
further growth at home has proved difficult. The company is reportedly
planning to buy into Sprint Nextel, a mobile company in the US.

(For more biz stories, please visit Industry Updates)

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