China Unicom revealed its parent company is reviewing its ownership structure in move that could see the company take on more private investment.
In a filing to the Hong Kong stock exchange, the operator said China United Network Communications Group (Unicom Group) – the company’s controlling shareholder – was “contemplating, developing and progressing significant matters relating to mixed ownership reform”.
This could then be used as a platform for a change in shareholding at the company.
Its move comes at a time when the Chinese government is eager to encourage private investment to improve the country’s telecoms infrastructure and fuel competition in the sector by reducing state ownership, but not control.
Along with the country’s other leading operators, China Unicom is a majority state owned entity. It also possesses minority stakes and subsidiaries listed on the Hong Kong stock exchange.
The company previously announced it could be selected to be in the first pilot for the government’s mixed-ownership reform initiative.
China Unicom struggled during 2016, issuing three separate profit warnings through the year. While the company reported some improvement in Q4 2016, chairman and CEO Wang Xiaochu recently warned an end to domestic roaming fees would slow its recovery in 2017.
GSMA Intelligence estimates placed China Unicom as the second largest operator in the country at end Q1 2017, with a 20 per cent market share. Leader China Mobile held a 64 per cent share, while third-placed China Telecom held 16 per cent.