CHINA MOBILE PARENT SNAPS UP MILLICOM TO BECOME GLOBAL PLAYER
China Mobile Communications Corporation (CMCC), the state-owned parent of China Mobile, the largest cellco in the world by total subscribers, has agreed a deal to acquire Millicom International Cellular (MIC) for around USD4 billion. It is widely expected that the required final regulatory approval from Beijing will be granted. The agreement follows weeks of speculation over MIC’s future, and comes only after rival suitor Investcom dropped out of the bidding, after it was itself purchased by South Africa’s MTN.
The acquisition of MIC marks CMCC’s first investment outside of Asia and only its second outside China; the first came in the fourth quarter of 2005 when it agreed to buy People’s Telephone, Hong Kong's third largest cellular operator by subscribers, for approximately USD300 million. Despite ongoing soaring demand in its domestic market for mobile services, rumours have circulated for some time that CMCC harbours ambitions to establish itself on the world stage, and the purchase of Luxembourg-based MIC paves the way for entry into 16 developing markets throughout Africa, Central America, South America and South Asia. At the end of 2005 MIC claimed 8.9 million total subscribers (7.7 million proportionate subscribers) worldwide, while revenue for the fiscal year stood at USD1.1 billion, up 18% from 2004.