Acquisition of Tietong in-line with CM’s Strategy to Transform into Full-service Operator

Date: 2015-12-01

■ Tietong’s deal to boost China Mobile’s bundled mobile/fixed services, leveraging its established fixed-line customer/infrastructure base

Tietong acquisition to strengthen mobile/fixed integrated service
China Mobile announced to acquire Tietong’s assets (net asset value RMB30.0bn) from Parentco CMCC for RMB31.9bn by end of FY15E. The deal is in-line with CM’s announcement during 1H15 results, and we believe it is positive to CM’s long-term strategy to offer bundled mobile/fixed services to enhance its competitiveness, aligning with its aggressive expansion in fixed-line business in FY15. The deal includes Tietong’s backbone network, metro fibre, IPv4 addresses, and property/ land assets, as well as 12mn broadband customers (vs CT’s 110mn, CU’s 72mn) and 18mn fixed-line customers (vs CT’s 136mn, CU’s 76mn). Tietong now has 47k employees (~10% of CM’s existing employees).


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