 |
Telecom Firm Eyes SOE Backing
Jitong Communications Co, one of China's seven basic telecom operators, has opened its arms to State-owned enterprises in an effort to attract investment.
"We welcome State-owned enterprises to be our new strategic investors and plan to expand the capital stock from 447.4 million shares to 3 billion," a company spokeswoman said.
Investors will also become partners when Jitong is publicly listed domestically or overseas, provisionally scheduled for the end of this year or early next year, she said.
"It would be a good investment opportunity with low risks and foreseeable rich returns," said Jitong.
Founded in 1994, Jitong is among the country's oldest carriers.
However, its development has been severely restricted by a shortage of groundbase network resources.
It has constructed 10,000 kilometres of optic fibre network with another 22,000 kilometres under construction.
But that is far from enough and the company has to rent ground network resources from other operators.
Compared with other six basic telecom operators -- China Telecom, China Mobile, China Unicom, China Railcom, China Netcom and China Sat -- Jitong has relatively minor competitive advantages.
"A backbone optic fibre telecom network is what Jitong urgently needs and it is the first project it will invest in after it gets money from the investors," said Jing Linbo, a researcher at the Chinese Academy of Social Sciences.
Focussing on businesses based on the Internet, Jitong presently provides Internet telephony, Internet access and network leasing services to the public.
The company's revenue reported a 200 per cent growth last year and it has opened 118 branches in the country, according to the spokeswoman.
Jitong last year postponed its scheduled initial public offering (IPO) in the stock markets of Hong Kong and New York because of an unfriendly atmosphere.
The company explained that it still planned a public offering but was prepared to wait for milder weather.
Two of the country's other telecom operators China Mobile and China Unicom have already listed in the two overseas stock markets, with China Telecom, the country's dominant fixed-line carrier, also seeking to go public overseas.
To solve the capital shortfall, Jitong earlier accepted investment from Jinzhou Port, which is mainly held by a non-State-owned company, Orient Group.
Its move sparked concern among business insiders as Orient is the first non-State-owned firm to control major shares in a basic telecom company.
After the new equity placement, Orient is expected to be replaced by a State-owned company as the controlling shareholder.
Sources: China Daily
In This Section
|