CMCC’s acquisition of the Pakistani Paktel Corporation (controlled by Millicom) is now complete. This takeover has been carefully monitored by the telecommunications industry both at home and abroad. At February 14th, CMCC announced that the company has successfully acquired all shares owned by Millicom. It is reported that before the acquisition, both sides officially finished the transaction in Istanbul, with the new board of directors elected the Vice-president of CMCC Liu Aili as the chair of the board. Pakistani political leaders attended a ceremony celebrating that CMCC has officially entered the Pakistani telecommunication market and realized a breakthrough in their global plans.

At the celebration ceremony, China’s ambassador to Pakistan Zhang Chunxiang said that this deal is another milestone in Chinese enterprises’ investing in Pakistan and is another example in realizing President Hu Jintao’s commitment to Pakistan. After CMCC purchased Paktel, the corporation will increase investment in the local telecommunications infrastructure, promote local telecommunications, and improve employment levels, bringing Pakistani people real benefits. This acquisition has achieved a win-win situation between the two countries, and contributed to enhancing the Pakistani-Chinese friendship, and deepening their strategic partnership. Ambassador Zhang also called for relevant parties to provide all possible assistance in CMCC’s future operation in Pakistan and join hands to develop Pakistan’s telecommunications market.

Wang Jianzhou, president of CMCC, said that “We have been observing the Pakistani telecommunications market for a long time, and we believe that we can create value for Pakistani consumers and CMCC.” He said that the deal is not the end, but a beginning of a new journey. CMCC has sent an outstanding management team to Paktel to implement overall strategic planning and future operations.

Earlier in the year in January, CMCC and Millicom signed an agreement that saw CMCC purchase 88.86% of externally-distributed shares held by Millicom. In this transaction, Paktel was valued at 460 million USD.

Experts have commented that this acquisition fits in with CMCC’s principle of internationalization. Before the action, CMCC had repeatedly sent teams to carry out thorough investigations in Pakistan. To ensure that the transaction was carried out successfully, CMCC appointed Lynch Group, CICC, and KASB to be financial consultants.

Paktel was founded in 1990 and was the first telecommunications company to operate in Pakistan. Purchasing Paktel enables CMCC to enter one of the fastest growing markets in the world. Pakistan has the sixth largest population in the world at 160 million, and its telecommunications market is one of the fastest growing markets. By the end of 2005, the telecommunication diffusion rate was 12.8%, and the mobile communication market has entered accelerated growth. By October 2006, Paktel had about 1.56 million mobile subscribers, a 69% increase from 2005. The market share of the company is about 3.5% which sees it rank fifth among the six local mobile operators.

Industry experts think this acquisition is a significant breakthrough for CMCC of its “Going Global” strategy. Since purchasing Hong Kong CRC Wangzhong and becoming a shareholder in Phoenix TV, this is the first time CMCC has acquired an overseas telecommunication resource of strategic importance. With this acquisition, CMCC has entered a new market with great potential because of its large population, and the company will build up a good operation platform for further international expansion. Through overseas operation, CMCC can accumulate experience, use its existing advantage, and develop new space.

About CMCC:
CMCC is a wholly state-owned corporation group. It controls China Mobile which is the leading mobile telecommunications operator in China, and has the largest mobile telecommunication user group and mobile communication network in the country. The corporation is listed on the Hong Kong and New York stock markets and has the highest market value of all telecommunications operators.

Relative News