HONG KONG-China Unicom is still seeking to end more than 30 China China Foreign (CCF) joint ventures it has formed with foreign companies, including France Telecom, Sprint Corp., Telecom Italia, Bell Canada, Siemens, Deutsche Telekom, Metromedia International, Daewoo Corp., and several Hong Kong companies, such as New World Development, CCT Telecom Holdings, First Pacific, CNK Telecom and Henderson Investment.
The Chinese government required the carrier to wind up those joint ventures by the end of August. Unicom has asked its foreign partners to back out and is offering them an amount equivalent to their original investment plus a return of about 7 percent.
Most of the foreign firms, however, deem this settlement offer unfair and are bargaining for better terms for terminating the joint ventures.
South Korean conglomerate Daewoo said it may sue Unicom to recover US$6 million of revenue the company expected to receive in July. The Korean firm’s parent company, Daewoo Group, is reported to be almost bankrupt and badly needs money to pay off US$57 billion of debt.
Daewoo began its investment in the Chinese telecommunications sector back in 1997 by setting up a venture with Unicom, having provided capital and technical support to Unicom’s GSM network in Zhejiang, which posts a subscriber count of 270,000.
Hong Kong’s First Pacific also has invested in Unicom’s GSM networks in Shenzhen and Fujian.
The firm’s managing director, Thomas Yasuda, said First Pacific is now in discussions with Unicom on the new arrangements from Beijing regarding CCF investments, and some of the talks concern proper compensation.
