China's largest fixed-line service operator China Telecom Corp.
Ltd., listed on the Hong Kong stock exchange, on Wednesday denied
speculation that the company would spend four billion yuan to
purchase Beijing Telecom from its parent company, the China Telecom
Group.
"China Telecom hasn't held any discussions on the asset purchase
with the parent company yet," William Li, a senior manager from
China Telecom's investor relations department, told China
Securities Journal, a newspaper run by Xinhua News Agency.
Media reports on Tuesday said China Telecom planned to purchase
Beijing Telecom from its parent by the end of this year, the
leading branch under the China Telecom Group in terms of
revenue.
When China launched its telecom reforms in 2001, the fixed-line
service in south China's 21 provinces and municipalities went to
China Telecom, while that of north China's ten provinces and
municipalities was allocated to China Netcom, the nation's second
largest fixed-line operator.
After 2005, the two giants began to compete with each other for
business, prompting them to sign an agreement to respect each
other's "territory" to avoid vicious competition.
Any plan by China Telecom to purchase the assest of Beijing
Telecom would be regarded as China Telecom's first major move into
the territory of China Netcom.
China Telecom made a public announcement this June claiming it
had signed an agreement with its parent to buy all the equities of
China Telecom (Hong Kong), China Telecom (USA) and China Telecom
System Integrated Company for 1.41 billion yuan.
At the time there were suggestions from within the market that,
under pressure from the rapid expansion of the mobile phone
business, China Telecom would quicken its pace to acquire assets
and seek a full listing on the A-share market to enhance its
profit-making capabilities.
(Xinhua News Agency September 20, 2007)
