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To: JohnG who wrote (82130)	10/4/2000 9:16:04 AM
From: JohnG	Respond to of 152472

VOD wins share of China Mobile JohnG 10/04/00 - China Mobile to acquire networks in mainland China HONG KONG, Oct 04, 2000 (AP WorldStream via COMTEX) -- Chinese telecommunications giant China Mobile (Hong Kong) said Wednesday it would form a strategic alliance with mobile communications company Vodafone Group PLC in order to finance expansion of its business in mainland China. China Mobile said it would pay dlrs 32.84 billion to purchase seven mobile networks from its mainland-based parent company, issuing U.S. dlrs 22.67 billion worth of shares and paying the remaining U.S. dlrs 10.17 billion in cash. Vodafone, the world's biggest mobile phone firm, said it would invest U.S. dlrs 2.5 billion in the new China Mobile shares, gaining a coveted foothold in China's rapidly growing market. "We have been trying for some time to find a way to enter the mainland Chinese market. We believed this opportunity was not to be missed," said Chris Gent, Vodafone's chief executive. News of the long-anticipated acquisitions, which will add some 16 million subscribers to China Mobile's network of more than 20 million customers, helped boost the company's languishing share price Wednesday as investors bought after weeks of uncertainty over the deal. On the Hong Kong Stock Exchange, China Mobile's shares shot up 7.4 percent, or 3.75 Hong Kong dollars Wednesday to 54.7 Hong Kong dollars, accounting for a fifth of trading volume. Its gain pulled the benchmark Hang Seng index into positive territory. China Mobile announced in June that it would acquire networks in three of China's largest and most influential cities: Beijing, Tianjin and Shanghai, as well as in Liaoning, Hebei, Shandong and Guangxi. The company now operates mobile networks in six of the mainland's wealthiest provinces: Guangdong, Zhejiang, Jiangsu, Fujian, Henan and Hainan. Wang Xiaochu, chairman of China Mobile (Hong Kong), noted that with the newly acquired networks it would have a 55.9 percent share of the mainland market, with services extending across all of China's fast-growing coastal regions. "The assets themselves are of a high quality, in terms of growth rates, usage levels, network infrastructure, technology, revenues and margins. The potential for growth is ideal," Wang said. China Mobile is the listing vehicle for parent company China Mobile Telecommunications Corp., one of two companies that were formed when the government split the former state telecoms monopoly in an attempt to lower prices and improve service through increased competition. The number of phone subscribers has jumped to 10 million in 1992 to 200 million in 1998. Of those, 65 million are mobile phone users. Since only a small fraction of China's 1.26 billion people have mobile phones, the room for growth is huge. Lured by that potential, in return for what amounts to only a 2 percent stake in China Mobile, Vodafone agreed to share its expertise in management and technology. The deal calls for possible creation of joint ventures in the future. At least two other major mobile telecoms firms were reported to be planning stakes in China Mobile. Japan's NTT DoCoMo declined comment on reports it would buy a stake worth at least U.S. dlrs 1 billion although a company spokesman said the company continued to "see China's mobile phone market as attractive." Deutsche Telekom spokesman Ulrich Lissek would not comment on what he called "market speculation." He noted that his company, which has been engaged on a buying spree in Eastern Europe, was focused more on Western markets than on Asia. Wang also declined comment on those reports saying, "Just wait and see." By ELAINE KURTENBACH AP Business Writer Copyright 2000 Associated Press, All rights reserved -0-