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China Unicom and Telefonica Strengthen Strategic Alliance

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January 25, 2011

China Unicom and Telefonica Strengthen Strategic Alliance

By Anil Sharma, TMCnet Contributor

China Unicom and Telefonica, one of the world's largest telecommunications companies by market cap, have strengthened strategic alliance and have agreed on a new mutual investment.

Officials with China Unicom (News - Alert) said that the companies have agreed to deepen their cooperation in areas such as procurement, mobile service platforms, service to MNCs, wholesale carriers, roaming, technology, among others, where both companies have been cooperating since the signature of their strategic alliance agreement.

Company officials pointed out that both the companies have also strengthened their strategic alliance with a new mutual investment pursuant to which the parties agreed to increase their respective stakes by acquiring the equivalent of $500 million in the other party through the purchase of each party's shares.

This agreement follows the one reached back in 2009, where the two companies invested $1 billion in the other party's shares and entered into a strategic alliance agreement.

"Since the signing of the Strategic Alliance Agreement by China Unicom and Telefonica (News - Alert) in September 2009, the strategic cooperation between the two parties has been fruitful and we are satisfied in this regard,” said Chang Xiaobing, chairman of China Unicom, in a statement.

Xiaobing said that on the basis of existing cooperation, both parties have decided to enhance strategic alliance by further investing in each other's shares and deepening existing cooperation.

“We believe that the enhancement of strategic alliance will promote the competitive advantages of both parties and maximize shareholders' return," he added.

Cesar Alierta, chairman of Telefonica said that the company is very pleased to further strengthen its relationship with China Unicom.

“With a combined customer base of 590 million accesses, approximately 10 percent of the world's population, this new step in the strategic alliance reinforces our leadership position and provides us with an exceptional springboard to continue to compete globally in the best conditions ever and jointly lead the new digital world, benefiting both our shareholders and customers," said Alierta.

TMCnet in November reported that ZTE Corporation, a global provider of telecommunications equipment and network solutions, will jointly introduce China Unicom’s multi-platform, multi-device application store, “WoStore” into Hong Kong.

The WoStore online application service is created by ZTE and will support all open smartphone platforms except for iPhone (News - Alert), and terminal devices such as tablet PCs and MIDs (mobile Internet devices). “Wo” is a 3G brand by China Unicom.

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Anil Sharma is a contributing editor for TMCnet. To read more of his articles, please visit his columnist page.

Edited by Janice McDuffee

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