China Telecom's intention of introducing strategic investors has aroused wide attentions of the industry. As one of the most likely investors, South Korea- based SK Telecom lately said that it would not buy a stake in the Chinese telecom carrier.

However, it would enhance the cooperation with China Unicom, one of the major competitors of China Telecom, according to president of SK Telecom.

Now SK Telecom is holding 6.6% of China Unicom, but the proportion will be reduced to 4% with completion of the telecom restructuring.

Some previous reports said that SK Telecom was interested in buying a stake in China Telecom. And SK Telecom would like to team up with China Telecom if conditions were ripe.

What is more, the South Korean company expects to set up win-win cooperation with companies in China, and the company will take every chance of expanding its business.

Several telecom operators like Qualcomm, SK Telecom and Singapore Telecommunications Ltd. were reported to be the possible buyers.

As the current second largest shareholder of China Unicom, SK Telecom would hold a 4% stake in China Unicom after the Chinese company merged with China Netcom Group Corp. (Hong Kong) Ltd., said China Unicom.

An earlier report said that SK Telecom had been in talks with China Telecom on making an investment while Qualcomm and Singapore Telecommunications Ltd. had both shown interests in becoming shareholders of China Telecom.

SingTel is considering injecting money in China Telecom, but they have not entered into talks yet, said sources.

The Singapore telecom operator and the US-based CDMA technology giant declined to comment on the matter.

China Telecom earlier announced its plan to take over the CDMA business from China Unicom, in accordance with the nation's revamp proposal. China Telecom and its parent company will have to pay CNY 110 billion for the deal.

Shortly after the announcement, Wang Xiaochu, chairman of the New York and Hong Kong-listed company, said the fixed-line carrier had been contacting with four to five companies to seek a strategic investor.

Market observers say it is necessary for China Telecom to lure a strategic investor for the CDMA network deal. China Telecom and its parent company will possibly run short of capital in the short term because it will need another CNY 30-40 billion to upgrade the CDMA network after getting it.

China unveiled its telecommunications industry reshuffle proposal on May 24, 2008, encouraging the six existing operators to merge into three. The merged China Telecom, China Unicom and China Mobile will be the survivors after the reform.

Source:SinoCast China IT Watch