Mergers, Acquisitions and Takeovers Case Study

3G War: Consolidation in Chinese Telecom Sector

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Abstract:
Fixed line operator China Telecom was set to merge with the mobile phone network operator, China Unicom. The merger would enable China Telecom to buy the CDMA (code division multiple access) network of China Unicom for 110 billion renminbi and thus to acquire a long awaited 3G (third generation) license. However, this consolidation drive would create a monopoly in the fixed line and CDMA business in China and might become a major obstacle in developing China's telecommunications industry. Moreover, industry experts believed that China's telecom industry badly needed competition from international telecom giants in order to offer quality services.This case is intended for MBA / telecom management students and is designed to be part of the strategic management curriculum.

Pedagogical Objectives:

• To understand the Chinese telecommunication industry
• To understand the importance of 3G technology
• To analyse the synergies of the merger between China Telecom and China Unicom
• To comprehend the negative effects of the monopolisation of the Chinese telecommunication sector.

Keywords : Telecom, China, China Telecom, China Unicom, Third generation (3G) licenses in China, First generation mobile standards, Second generation mobile standards, Third generation mobile standards, GSM (global system for mobile communications), CDMA (code division multiple access), TD-SCDMA (time division synchronised CDMA), China Netcom, China Mobile, PHS (Personal Handy phone System), MII (The Ministry of Industry Information), MPT (Ministry of Posts and Telecom), DGT (Directorate General of Telecommunications).

Contents: 
Mobile Handset Industry: The Changing Trends
Mobile Phone Standards Across The World During Second Generation
Chinese Telecom Sector
China's Telecom Growth Rate and GDP Growth Rate
Layout of China’s Telecom Market
Financials of China Telecom
Past Present and Future Scenario in Telecom Sector
3G Mobile Technologies