China Mobile on Friday announced that its fixed-line subsidiary CM TieTong has agreed a 31.9 billion yuan (€4.7 billion) deal to acquire fixed broadband provider TieTong from China Mobile’s sister company CMCC.
The deal gives China Mobile direct control over its fixed-line assets, enabling it to become a fully-integrated fixed and mobile operator.
"It will enable the company to obtain a fixed broadband licence and provide an opportunity for the compa ny to grasp the opportunities in the fixed broadband market, accelerate the growth potential of the smart home and benefit from the expected growth of the PRC (People’s Republic of China)’s fixed broadband market," said China Mobile, in a stock exchange filing on Thursday.
TieTong boasts a nationwide backbone network, as well as metro fibre networks and retail outlets in all 31 of China’s provinces. It currently serves 10 million fixed broadband and telephony customers.
China Mobile said the deal will expand its customer base rapidly, "enabling the provision of bundled services to reduce churn rates as well as improve user loyalty and revenue."
It will also bring in employees with experience and expertise in the management and maintenance of fixed networks, the telco said.
The final purchase price could rise to CNY32.9 billion depending on changes to TieTong’s working capital, capital expenditure, depreciation and liabilities, China Mobile said.
The transaction is expected to close by the end of 2015.
