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Technology Stocks : Vodafone-Airtouch (NYSE: VOD)
VOD 13.95+2.4%1:20 PM EST
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To: MrGreenJeans who wrote (2866)6/13/2000 9:05:00 AM
From: Jules Shear  Read Replies (1) of 3175
 
I believe the rules for being an operator in China are very restrictive. The rules for being an equipment supplier (i.e., Motorola, Ericcson, etc.) are much more favorable. Foreign telcos have been trying for years to get into the market on favorable terms-but I think that shareholder rights on operations, process for recognizing profits under Chinese GAAP for a foreign carrier, maximum % ownerships allowed by foreign company, board participation, etc. are all very negative and thus have been preventative in allowing companies like VOD access. The carriers are one of the most regulated groups in all of China and thus the reason you have not seen much activity to date regarding foreign investment and although I'm not an expert on China's WTO situation-I don't think "carriers" are included since their still under government control (same is true in Canada about amount of foreign ownership of government controlled spectrum)

This agreement looks like a really clever move on VOD's behalf. In China, relationships and precedence are critical and this "get a foot in the door" approach to gaining more access and trust with Unicom could prove to pay huge dividends in the future.

At a minimum, the favorable roaming terms should see immediate benefit and could set the stage for the first "global one-rate" plan to be offered.
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