China completes telecom sector reshuffle
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China Mobile announced a formal split of China Railcom Communication (China Railcom) yesterday, marking the end of the Chinese telecom industry's reorganization.
According to the plan, China Railcom will transfer its command and management operations of the railway communication network scheduling to the Ministry of Railways and its fixed-line and broadband businesses will be retained by China Mobile.
"China Railcom is a wholly-owned subsidiary of China Mobile Group, but maintains independent operations," said China Mobile Board Chairman Wang Jianzhou, while the group's listed arm doesn't intend to acquire the loss-making China Railcom which was acquired by China Mobile last May.
The split, which involved only railway communication operations, would boost China Railcom's development, Wang added.
The Ministry of Industry and Information Technology had earlier made it clear that China Mobile can only develop the fixed-line telephone service operation through China Railcom. The split will accelerate the integration of the companies' fixed-line businesses and add fuel to China Mobile's comparatively-weak fixed-line sector, said analysts.
China Mobile agreed to deliver China Railcom's railway communication business, assets and staff to the Ministry of Railways on Nov 12.
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