Date
21 August 2017
China Mobile may restructure its mobile network application services for music, reading, games, animation and video for later spin-off. Photo: AFP
China Mobile may restructure its mobile network application services for music, reading, games, animation and video for later spin-off. Photo: AFP

China Mobile said to form new media company for spin-off

China Mobile Ltd. (00941.HK) is said to be integrating its five content groups into a new media company and inviting private capital to the business, the Hong Kong Economic Journal reported on Friday, citing a Sina technology news report.

Chairman Xi Guohua said last week that it may restructure its mobile network application services for music, reading, games, animation and video for later spin-off.

Industry veterans expect the company to introduce private funding to the content business in line with recent government initiatives in support of a mixed ownership structure for state-owned enterprises, Beijing News reported.

A similar move is seen at China Petroleum & Chemical Corp. (Sinopec) (00386.HK, 600028.CN), which is reportedly planning to sell up to a 30 percent stake in its downstream oil marketing business for US$16 billion.

China Mobile’s media company will be fully market-oriented in operation and the establishment of independent subsidiaries is intended to attract foreign capital, Caixin.com reported.

But the company may also want to maintain a major role in the development of the new company and continue to exercise administrative control over the business even after introducing private capital.

A mixed ownership structure introduces private funds to state-owned enterprises and allows for joint development of the business. It is also seen as a means to make a company more market-oriented and competitive, the report said.

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