Telefónica and China Unicom will invest in each other's business

Spanish incumbent operator Telefónica and China Unicom have announced that they are to deepen a relationship that was formalised in September 2009. Each will invest a further $500m in the other, taking Telefónica’s stake in Unicom to 9.7 per cent, and the Chinese carrier’s shareholding in Telefónica to 1.37 per cent.

In addition, the appointment of a China Unicom representative to the Telefónica board will be recommended at the Spanish carrier’s next General Shareholders’ Meeting, the firms said.

The two carriers invested $1bn in one another’s stock in September 2009, pledging to co-operate in a number of areas, including infrastructure and handset procurement, wireless service platform development, enterprise solutions for large multinationals, general R&D, roaming, some unspecified strategic initiatives and an exchange programme for employees.

Chang Xiaobing, chairman of China Unicom, said that this cooperation had proven “fruitful” so far and that the firm was “satisfied” with the two firms’ progress. “We believe that the enhancement of [the] strategic alliance will promote the ocmpetitive advantages of both parties and maximise shareholders’ return,” he said.

His opposite number at Telefónica, César Alierta, pointed out that the two firms’ combined subscriber base accounted for ten per cent of the world’s population, with 590 million subscriptions. “This new step in our strategic alliance reinforces our leadership position and provides us with an exceptional sprintboard to continue to compete globally in the best conditions ever and jointly lead the new digital world, benefiting both our shareholders and customers,” he said.