Spanish operator Telefónica and China Unicom expand partnership

The Spanish operator Telefonica announced today that it has expanded its alliance with China Unicom in the area of networking sharing. Under the pact, Telefonica will have access to the Chinese company’s infrastructure in countries of Asia, Europe and Oceania.

The agreement, signed by Telefonica International Wholesale Services, will allow Telefónica to expand its global presence by sharing the international networks of China Unicom. The company may use the China Unicom’s network in Hong Kong, Japan, Singapore and Australia in the East Asia and Oceania, and France and Sweden in Europe.

Similarly, China Unicom will expand its global coverage through the infrastructure of Telefonica. The Chinese company will expand its network with the network of Telefónica in Argentina, Brazil, Chile, Colombia, Ecuador, Guatemala, Panama, Peru, Venezuela, Mexico, USA, Puerto Rico, Germany, Austria, Belgium, Bulgaria Denmark, Slovenia, Slovakia, Spain, Estonia, Finland, France, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Morocco, Norway, Poland, Portugal, Netherlands, Czech Republic, Romania, Sweden and Switzerland.

According to Telefónica, the agreement is the key for both operators to expand their capabilities to provide communications services to multinational customers in different geographic areas where the partner operates.

The covenant is included in the framework of the alliance signed in 2009, which is based on cooperation in areas such as shopping, mobile platforms, multinational wholesale services, roaming and new technologies. In October, Telefonica announced that it had signed an agreement with China Unicom intended to promote the development of joint projects in the area of the connection between machines (machine to machine or M2M), through technologies such as mobile communications, radio frequency identification (RFID), sensors and global positioning systems.

The share exchange plan included in the agreement allows Telefónica to control 9.6% of China Unicom, which in turn owns 0.89% of the Spanish company. The Chinese operator has become one of the most profitable assets for Telefónica. Shares of China Unicom have risen around 50% since early this year, reaching a market capitalization close to 50,000 million dollars, which implies that the involvement of Telefónica has a value of 4,800 million.