skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Ovum view


Multiple investors have purchased a 35.2% stake in China's second-largest operator, China Unicom, for CYN61.7bn ($9.3bn). The deal was essentially brokered by the government, part of its industry-wide negotiations to "invite" investors into numerous state-owned enterprises adversely affected by slower economic growth. The stake sold is higher than what was speculated in the industry. Moreover, no single internet player, such as Tencent, Baidu, or Alibaba, emerged with more than a 5% interest, limiting potential collaboration opportunities.

The deal will not see Unicom become "Super SMART"

Last week, it was announced that several investors had agreed to purchase 35.2% of Unicom, including insurance firm PICC (the largest of the new investors, with a 10.2% stake), Tencent (5.2%), Baidu (3.3%), and Alibaba (2.0%). Parent firm China Unicom Group now holds 36.7% of the company, while 25.4% is owned by public shareholders.

In late 2016, speculation on the mainland was that around 20% would be sold in Unicom, and that Alibaba was the likely buyer of the entire stake. Under the final deal, Alibaba and other noteworthy internet companies – Tencent (owner of WeChat) and search engine Baidu – have emerged with very small stakes. These players operate their own successful telco-like businesses (e.g., OTT messaging) and compete directly with Unicom in other areas (e.g., m-commerce).

In our report The "Super SMART" Player, we argued that having an internet player as a partner would solidify Unicom as Super SMART, provided synergies could be leveraged. The Super SMART player is the merger of a very large communication service provider (CSP) that plays aggressively in five areas – services, management, applications, (customer) relationship, and technology – plus the internet player. An outfit is deemed Super SMART because it vertically integrates the CSP's assets (network, large customer base, cash flow) with the services and platforms of the internet player.

However, under the sale, no internet company has emerged with a big enough stake to influence Unicom. Chinese media report that stakeholders from the new private companies will be members of the board, so they might have some influence over the company's long-term development.

Overall, though, we do not believe any major synergies that will be enough to change the current operator landscape will emerge. Hence, we would not categorize Unicom as a Super SMART player in the wake of this deal. At best, this deal really gives Unicom a cash injection and room for some collaboration opportunities. But the new Unicom is still no match for its bigger rival, China Mobile.


Further reading

The "Super SMART" Player, TE0009-001616 (March 2017)


Nicole McCormick, Practice Leader, Broadband and Multiplay

Recommended Articles

  • Service Provider Markets, Consumer & Entertainment Services,...

    MWC 2018 Highlights

    By Ronan De Renesse 27 Feb 2018

    Over 20 of our senior Ovum analysts and consultants attended this year’s Mobile World Congress in Barcelona at the end of February. In between meetings, briefings and presentations, our analyst team were blogging and tweeting about key developments, trends and rumors. Have a look through our daily MWC 2018 Highlights to find out what happened.

    Topics 5G AI IoT Cloud Payments SDN/NFV Smart home

  • Internet of Things

    IoT Viewpoints 2018

    IoT Viewpoints explore the IoT opportunity in 2018 and beyond. Download our latest e-book to get our newest collection of thought leadership articles on the emerging IoT trends, technologies and opportunities.

    Topics IoT

  • Consumer & Entertainment Services

    US pay TV: Is it facing an existential threat?

    By Adam Thomas 28 Mar 2018

    With US pay TV having endured the worst year in its history, thoughts have inevitably turned to the future. The likelihood remains that the immediate future will remain highly uncomfortable for everyone except the scaled multinational digital platforms.


Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700

Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

Email us at

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 788 597 5160 or email us at

Contact marketing -

Already an Ovum client? Login to the Knowledge Center now