China Unicom tipped to become more market-driven under ‘mixed-ownership’ scheme

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China Unicom’s Hong Kong shares resumed trade on Thursday following the company’s announcement it is poised to take on a a strategic private sector investor. Photo: Nora Tam

Bien PerezandJennifer Li

Published: 11:00am, 6 Apr 2017Updated: 7:38am, 7 Apr 2017

With the central government’s mixed-ownership plan now in motion, China Unicom may be able to step up its transformation into a market-driven company like most telecommunications network operators outside of the country, according to analysts.

Unicom, operator of the world’s sixth largest mobile network by subscribers, said on Wednesday that its Shanghai-listed parent, China United Network Communications, plans to take on board a strategic private-sector investor under Beijing’s ambitious programme to reform state-owned enterprises (SOEs).

“While the details are yet to be ironed out, what we will be looking for is whether China Unicom can achieve its objective to operate more like a private company,” Jefferies equity analyst Edison Lee said on Thursday.

Bernstein Research senior analyst Chris Lane pointed out that “the concept of mixed ownership is to enable the company to be more market-driven”.

That means Unicom’s strategy would be about planning and deploying business resources based on market conditions and its customers’ changing needs.

The operator’s recent losses had been a direct result of its previous focus on 3G expansion at a time when consumers on the mainland wanted faster 4G mobile broadband services.