Telecommunication News
- Tietong looks to go public in two years
Date: 7-Dec-2006 Sources: (Xinhua Online)
China Tietong Telecommunications Corp, one of the mainland's six telecom operators, said it would seek an overseas listing in two years.
'We aim for a dual listing in Hong Kong and Singapore in two years if the conditions are ripe,' Chairman Zhao Jibin told China Daily.
If conditions aren't good, he said, China Tietong would go for a Hong Kong listing first.
So far, the mainland's four biggest telecom giants - China Mobile, China Unicom, China Telecom and China Netcom - have traded their shares in Hong Kong. Only China Tietong and China Satellite Communications are not listed.
But before going public, China Tietong, which earns money mainly by providing telecom services to railways, will first try to boost its net assets and business scale to be able to compete with larger rivals.
'Efficient and sizeable net assets are a prerequisite for us to float shares in overseas markets,' Zhao said.
As the unlisted firm is unable to raise money from the stock market, it will seek partnerships and issue bonds to establish a war chest to bankroll its expansion.
So far, China Tietong has worked with Hong Kong-listed CITIC Pacific to construct the GSM-R network, a new mobile communication scheme for railways.
The company also plans to raise 3 billion yuan (375 million dollars) through a long-term bond sale in 2007. That will add to the 2 billion yuan (250 million dollars) it has raised through a one-year bond sale this year.
'It's understandable that China Tietong is eager to boost its size,' said Paul Chan, a telecom analyst at Hong Kong-based Taifook Securities. 'At present, it's just too small to compete.'
Besides, Chan said, 'all the mainland's telecom players are (raising money) to secure a better position to prepare for the issue of 3G licenses.'
He also said China Tietong has little chance of being acquired by a larger rival because it serves a unique group of users.
China Tietong earned 12.9 billion yuan (1.6 billion dollars) in revenue from January to October. The figure is expected to reach 15.5 billion yuan (1.94 billion dollars) for the whole year, representing a year-on-year increase of 15 per cent, Zhao said.
Its subscribers of fixed-line and broadband services in China will grow to 20 million and 2.97 million by the end of the year, up 32 percent and 50 percent on an annual basis.
China Tietong is expected to see a 5 per cent growth rate annually in earnings from railway customers in the next five years, Zhao said.
His confidence was largely based on the increasing mileage of the mainland's railways, which will amount to 87,000 kilometres by 2010 and 100,000 km by 2020, up from the current 75,000.
As for the long-awaited third-generation (3G) mobile business, Zhao said he hopes to see the Ministry of Information Industry issue 3G licenses 'as soon as possible.'
Mainland telecom companies have been expecting the government to give the green light to 3G mobile for five years. When it happens, the move is expected to generate more than 10 billion dollars in spending on equipment while stimulating further growth in the mainland's maturing mobile market.
Repeated delays, however, have made firms inpatient, especially fixed-line operators such as China Telecom and China Netcom, which are expecting 3G operations to save them from slowdowns in the telephone business.
China Tietong, which has 19.2 million fixed-line users and 2.83 million broadband subscribers, is also eager for the license, because 'it will definitely create a fresh revenue source.'
Analysts generally believe the mainland's big-four telecom firms China Mobile, China Unicom, China Telecom and China Netcom may get the first batch of 3G licensees. But China Tietong has also been picked by the Ministry of Information Industry to conduct WCDMA and TD-SCDMA trial runs in Beijing and Shanghai.
'We could cooperate with 3G operators after the licensees are issued if we are not in the first batch,' said Zhao, adding China Mobile would be the 'most ideal partner.'
'China Teitong has completed and unified its national networks and China Mobile is the mainland's largest mobile carrier ... our future co-operation will unleash huge synergy,' Zhao said.
Its 3G test results are good in terms of coverage and various technological standards and have met the requirements of commercial use of the 3G standards, he said.
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