With four-month efforts, the new China Unicom came to light lately. With completion of the merger, the new company will be named as China Unicom Network Communications Company Limited. It is a sign that the biggest ever asset transaction and merger in China's history has been completed.

To ensure sustainable healthy development of the telecom industry in China, the Ministry of Industry and Information Technology, the Ministry of Finance, and the State Development and Reform Commission jointly initiated the sweeping telecom regroup.

Chang Xiaobing, director of the organizing committee for the merger, says that the establishment of the merger turns a new page in China's telecom industry.

After the merger, the new company will make it the priority to step up unified operation of business of the two companies, integrating across the board wireless and fixed line networks and strengthening its efforts to build broadband network around the country.

China Mobile will pay CNY 50 billion to China Unicom under a decision made by the State-owned Assets Management Committee. China Unicom will use the money to set up wireless networks.

The reason for the committee to make such decision is that China Telecom does not have enough money to buy the CDMA networks from China Unicom.

Industry analysts say that such move of the committee is aimed at propping up the weaker telecom carriers. But it is unreasonable, because China Mobile is the biggest rival of China Telecom after the national telecom restructuring.

The decision of the committee has taken a toll on China Mobile, which is struggling with several negative factors. First it needs money to develop TD business. Second, it will have to develop broadband business on its own. Finally it will see its user turnover rate keep swelling in the future as the Ministry of Industry and Information Technology asks China Mobile to allow its subscribers shifting to other telecom carriers' network by keeping their previous mobile phone numbers.

As Chinese government is putting the finishing touch on the latest telecom industry regroup, as the merger between China Tietong and China Mobile and China Telecom's purchase of the CDMA network of China Unicom are reaching the end.

By far only China Telecom's purchase of the basic telecom services of China Satcom has not been carried out, because the deal requests the telecom carriers to come to an agreement with China Aerospace &Technology Corp (CASC). China Telecom kicked off negotiations with China Satcom in this August.

In terms of the telecom regroup plan, other businesses of China Satcom will be transferred to CASC. And the commission ask the three parties to put an end to the merger and purchase by the end of this year.

Source:SinoCast