China Mobile has put in a CNY31.88 billion ($4.98 billion) for local fixed-line provider Tietong in order to bolster its portfolio of assets.
The Chinese market leader expects the deal to go through by the end of 2015, and is financing the acquisition from sister firm CMCC with its own resources. The deal provides China Mobile with further network infrastructure - most notably a sizeable metro fibre network and backbone network – allowing the operator to augment both capacity and coverage.
The acquisition of Tietong, which has over 10 million broadband and fixed-line customers, will expedite China Mobile’s transition into a fixed-mobile operator, thereby allowing it to compete against the bundled packages increasingly offered by its closest rivals. The operator is aiming to reduce churn by offering customers all-in-one packages.
Buying Tietong from CMCC will simplify the processes of management and operations between the 2 entities, as well as giving China Mobile a greater foothold in the smart homes space.