高盛：China Telecom Service

Excitement over restructuring newsflow may be premature

Jun 11th 5页

SCMP reports that SASAC has approved China Unicom split
The June 9 South China Morning Post reported that “China’s State-owned
Assets Supervision and Administration Commission (SASAC) has
approved the dividing of China Unicom...according to Shanghai Securities
News citing unnamed sources.” The story outlines the following scenario,
which is not new in terms of recent market expectations: China Telecom
(CT) gets China Unicom (CU) CDMA, CU GSM merges with China Netcom
(CNC) and China Mobile (CM) purchases China Railcom (CRC, NC). It also
cites CNC’s recent Rmb2 bn bond issuance and CT’s AGM approval to give
management flexibility to issue new shares as supporting evidence.
But this may be a misquote, and SASAC is not the decision-maker
The original Chinese version of the Shanghai Securities News article (from
June 7) (http://www.cnstock.com/paper_new/html/2007-
06/07/content_54984612.htm) actually translates as “SASAC may have
preliminarily set its telecom restructuring plan,” i.e. does not say anything
has been “approved”. Moreover, we highlight that SASAC is not the final
decision-maker on restructuring – it may have its own plans/proposals, but
any final decisions are likely to require consensus from SASAC, National
Development & Reform Commission (NDRC) and Ministry of Information
Industry (MII) and ultimately can only be approved by the State Council.