Telefonica looking to buy 10 percent stake in China Unicom.(CHINA)

Asia Pacific Telecom, July, 2008

The Financial Times reported on its Web site that Telefonica SA (TEF) is keen to acquire a 10 percent stake in China Unicom Ltd. after the revamping of the Chinese telecommunications industry. The report stated that Telefonica currently owns a 5 percent stake in China Netcom Group Corp., which is also its strategic ally.

Its stake in China Netcom is likely to rise to 7.2 percent. China Unicom is slated to buy China Netcom later on this year. Despite the fact that Telefonica's stake in the enlarged entity will be reduced to 3 percent, the Spanish company is in a fairly good position to pursue a strategic alliance with China Unicom.