China Mobile agreed to acquire a 20 per cent stake in Chinese software company AsiaInfo, a move aimed at deepening their relationship as the country extends moves around 5G and cloud-based services.

Beijing-based AsiaInfo, the largest telecoms OSS and BSS supplier in China, will issue 182.3 million new shares valued at HKD1.4 billion ($180.6 million) to China Mobile. The share subscription is expected to close in two weeks.

In a stock market filing, AsiaInfo said the deal will consolidate its financial position and provide additional funding for future development. It noted the companies will jointly explore opportunities in strategic areas including 5G network intelligent activities, data-driven operations, vertical industries and corporate cloud.

Despite deepening its ties to the market-leading operator, AsiaInfo insisted the deal would also benefit its relationship with China Telecom and China Unicom.

In its 2019 earnings statement, AsiaInfo said it provided services to 247 operator customers, with software supplied to 59 large enterprise customers, an increase of 55 per cent compared with 2018.

Adjusted net profit rose 11.7 per cent year-on-year in 2019 to CNY673 million ($95.1 million), while revenue increased 9.8 per cent to CNY5.7 billion.