China’s telecoms merger

Telecom service providers in China are to undergo a major overhaul in the coming months, involving a consolidation process in which six of the major providers will be merged into three companies.

It is expected that China Telecom, China Mobile and China Unicom will be the three companies that survive the merger.

China Telecom will be expanding into the mobile telecoms market by taking over the CDMA business release from China Unicom. China Unicom will be merging with China Network Communications to enable the company to focus on GSM business plans and fixed-line telecoms services, which are currently provided by China Telecom.

The merging process will create a high level of new demand for telecom network equipment, including optical network equipment, CDMA and next-generation networks (NGN) related products.

The new demand for products resulting from the mergers could cause China’s annual expenditure on telecom’s networking equipment to double. The market is already work US$8 billion, and the expansion is expected to spell new business opportunities for international telecoms equipment providers.