Stock transfer to Tencent, Baidu and Alibaba, among others, will raise money for 5G development
China Unicom has announced plans to issue and transfer stock to Chinese private investors and its employees in a move that will raise about CNY 77.9 billion (US$11.67 billion). The operator will use the funds to continue evolving its network toward 5G.
The move is part of the “mixed ownership reform plan” being advocated by the Chinese government that will allow state-run Chinese firms to attract private investment.
China Unicom announced that its China United Network Communications unit, which is listed on the Shanghai stock exchange, “entered into framework cooperation agreements with Tencent, Baidu, Jingdong, Alibaba and others” on August 16, whereby new shares valued at $9.25 billion and existing shares valued at $1.94 billion will be sold to the private investors. In addition, China Unicom also confirmed that shares valued at $481 million will be made available to employees in an equity incentive scheme.
The Chinese telco plans to use the proceeds for upgrading 4G capabilities, technology validation and enablement of 5G network related technologies, launch trial programs in relation to the 5G network and develop innovative businesses.
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China Unicom has not yet defined a timeline for the commercial launch of 5G technology, Deputy General Manager of the Network Construction Department Ma Hongbing previously told reporters during Mobile World Congress Shanghai.
“The key elements that will make the deployment of 5G feasible and commercially possible are not yet finalized, so we are not in a position to have a clear timeline towards the deployment of this technology,” the executive said on the sidelines of the event, which took place in June.
China Unicom has conducted a number of lab trials of 5G technology during the last year with a number of vendors including ZTE, Huawei, Nokia and Ericsson. “We have also worked with ZTE and Huawei this year in field trials in Shanghai and Guangzhou,” the executive added.
At the end of July China Unicom had 270.7 million mobile customers, of which 145.2 million were 4G subscribers, and almost 77 million broadband customers.