SingTel – BT

SingTel in talks with Chinese telcos

Restructure of Chinese telecom market opens doors to foreign investors

SINGTEL, South-east Asia’s largest telco, is in talks with operators in China about investing in the world’s biggest telecoms market, which is being overhauled and opened to foreign investors.

‘It’s a market we have been monitoring. We have been in discussions with various operators in the China market,’ SingTel’s chief executive officer, Chua Sock Koong, told reporters on the sidelines of an industry conference.

Last month, Beijing unveiled a long-awaited sector revamp, aimed at improving competition and rolling out high-speed third-generation mobile services, in what has been called the world’s largest industrial reorganisation.

The restructure also opens the door to foreign investors who have been restricted to taking small stakes, such as Vodafone’s 3.3 per cent investment in China Mobile Ltd.

‘We are not financial investors, we want to make investments as strategic partners, and the stake is one that would give us the necessary governance rights and involvement at the board and management level,’ Ms Chua said.

‘There are ongoing engagements but no deal has been done,’ she added, without naming any firms.

Earlier this month, media reports citing unnamed sources said SingTel was considering investing in fixed-line operator China Telecom Corp, although there have been no formal talks.

This follows China Telecom’s comments that it was in talks to sell a stake to a strategic investor and had been approached by four or five companies.

China Unicom early this month paid US$24 billion for a fixed-line rival and sold a network for almost US$16 billion as part of the industry reshuffle.

SingTel, which derives about two thirds of its pre-tax earnings from operations outside Singapore, is seeking acquisitions in growth markets to expand its earnings by double-digits over the medium term.

SingTel was actively involved last month in potential takeover talks between India’s top mobile operator Bharti Airtel Ltd, in which it owns an around 30 per cent stake, and South Africa’s MTN Group Ltd, according to a source familiar with the situation.

But Bharti’s talks with MTN collapsed over how the two would structure a combined entity.

SingTel, Singapore’s largest listed company, holds stakes in various mobile operators in markets ranging from Pakistan to Indonesia. It also owns Australia’s second-largest telecoms firm Optus. — Reuters

Leave a Reply