Spain's Telefonica increases China Unicom stake

Posted 09 8 2009 7:13AM

MADRID (AFP) – Spain's Telefonica will increase its stake in China Unicom to more than 8.0 percent while the Chinese operator will take an 0.88 percent share in the Spanish giant, the companies announced Sunday.

The two companies signed a subscription agreement under which each agreed to invest the equivalent of one billion dollars in the other through shares acquisitions, according to a joint statement.

The new strategic alliance also covers joint acquisition of infrastructure and equipment for customers, joint development of wireless service platforms and joint provision of services, roaming and research and development.

"We are delighted with this alliance, which will bolster both of our companies' leadership positions, giving us a combined global customer base of nearly 550 million," said Telefonica chairman Cesar Alierta.

The companies agreed to share technical, management and operations expertise.

Telefonica previously held 5.38 percent of China Unicom, which with 140 million subscribers, is the smallest of China's mobile operators. The company hopes to gain ground on its bigger competitors, China Mobile and China Telecom, with the regional launch later this year of the iPhone.

According to government figures to the end of May, China has 687 million mobile phone users.