Industry Trend Analysis - China Unicom A Good Test Case For SOE Reform - JUNE 2017
BMI View : China Unicom is moving towards a mixed ownership model as part of the Chinese government's pilot SOE privatisation programme. Strategic private investment and a potential change in the shareholding of the company will help the company cut operating expenses and reduce debt.
China Unicom, one of China's three state-owned telecoms operators, is reportedly reviewing its ownership structure in order to attract more private investment. In a filing to the Hong Kong Stock Exchange (HKSE), the operator said China United Network Communications Group, the company's controlling shareholder, was working on developing a mixed ownership model, which could form a platform for change in the shareholding of the company. China Unicom, China Mobile and China Telecom are all state-owned entities, but certain investments and subsidiaries - including holding companies for most of their core infrastructure and services activities - are listed on the HKSE.
The Chinese government is taking gradual steps to encourage private investment in order to improve the country's telecoms infrastructure and promote fair competition. In January 2017, the CPC Central Committee renewed calls for private investment in China's telecoms operators amidst pressure to cut fees and other costs and accelerate service take-up. China Unicom was among the country's six state-owned enterprises (SOE) selected to be part of the government's first pilot programme for the mixed-ownership reform initiative.
|Private Investment To Provide Relief In 2017|
|China Unicom - FY16 Earnings Results (CNYmn)|
|Source: China Unicom|