China Mobile buys 12 per cent stake in Taiwan's Far East Tone
Taipei - China Mobile, China's largest cellphone company, signed a strategic alliance agreement with Taiwan's Far East Tone Wednesday, becoming the first Chinese firm to invest in Taiwan's telecommunications business.
The signing ceremony was in Hong Kong, while Far East Tone Chairman Douglas Hsu spoke to reporters in Taiwan via a video link.
Hsu said that China Mobile will pay 17 billion Taiwan dollars (524 million US) to buy 444 million shares of Far East, gaining 12 per cent stake and one board director's seat in Far East Tone.
The two firms will launch a joint venture company in China with Far East and China Mobile holding 49 per cent and 51 per cent stake respectively.
The two plan to cooperate in purchasing, voice and digital services, value-added services, roaming and networking.
"We can have access to the broad market in China, and China Mobile can acquire Taiwan's software resources," he said.
Hsu said that Far East Tone evaluated China's top three cellphone service providers, but picked China Mobile because it is very international, just like Far East.
"China Mobile has invested in Pakistan, India and Africa. Far East Tone has Japan's NTT DoCoMo and the Singapore Telecom among its international board members," he said.
It is not clear when the Taiwan government will approve China Mobile's investment in Far East Tone, as Taipei still restricts Chinese investment in Taiwan, though it will lift the ban soon.
Far East Tone and China Mobile's tie-up underscores the war-up in Taiwan-China ties achieved by President Ma Ying-jeou since he took office on May 20, 2008.
Ma urged Taiwan and China to cooperate in economy and shelve political dispute.
After opening sea, air and postal links with China in late 2008, Taiwan plans to drop the ban on Chinese firms' investment in Taiwan in May.
Economics Minister Yin Chi-ming said Wednesday that Taiwan plans to open more than 1,000 types of business to investment from China, but will limit Chinese stake in a certain Taiwan business to less than 30 or 50 per cent of the business' total stake.
The businesses open to Chinese investment will range from manufacturing, service industry, construction, tourism, harbours and airport, he said.(dpa)