Collaboration with Alibaba and Tencent does not equal investment, says Unicom

Collaboration with Alibaba and Tencent does not equal investment, says Unicom

China Unicom has rejected reports suggesting that its collaboration on operating centres with internet giants Tencent and Alibaba indicates that the firms will invest in the operator.

The Chinese number two player is partnering with Tencent to establish an e-commerce operating centre in Shenzhen and Alibaba for a centre in Hangzhou. Both developments are in their early stages, but Unicom has flat-out denied that the partnerships play into the Chinese government’s efforts to reform the operator’s ownership as part of a broader push towards introducing public-private ownership structures.

“The establishment of these operating centres is not related to the mixed ownership reform plan”, said Unicom in a statement. It explained that the move was aimed at allowing its internal divisions to work together with firms “such as Tencent and Alibaba…to establish an integrated e-commerce operating system with internet partners and to optimise the capabilities of providing online integrated product design, research and development and operating and supporting services”.

China’s National Development and Reform Commission has granted Unicom approval to trial mixed-ownership reform which would likely result in the operator receiving more private investment. Reports in June pegged Tencent and Alibaba as key drivers of investment in Unicom worth around CNY70 billion, with the operator denying that it had reached any deals.

It was then reported in July that two more major Chinese internet players, JD.com and Baidu, would also invest in Unicom, upping the total investment to CNY85 billion ($12.6 billion). While Unicom has confirmed that it is in negotiations with possible backers, it notes that it “has not entered into any legally binding” agreements.

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