China Mobile Ltd’s plan to buy a stake in Far EasTone Telecommunications Co has got shareholders’ approval in Taipei. The deal is now subject to regulatory approval from both sides of the Taiwan Straits.
The deal, which still needs approval from regulators on both sides of the Taiwan Strait, is expected to be the first case of direct investment from a Chinese mainland firm into Taiwan.
Far EasTone shareholders passed a motion at the annual meeting of the island’s third-largest mobile-phone operator yesterday, authorizing the board to sell up to 444 million new shares, worth no more than NT$17.8 billion, to Beijing- based China Mobile, the world’s largest wireless company by subscribers.
Far EasTone’s Chairman Douglas Hsu said during the annual meeting of Taiwan’s third-largest mobile-phone operator, “We’re asking shareholders to approve the China Mobile investment because this strategic cooperation is the right direction for the company,”
China Mobile’s Chairman Wang Jianzhou, said The tie-up will facilitate China Mobile’s expansion and help it provide more comprehensive services.”It’s unclear whether the addition of another strategic partner as well as DoCoMo and SingTel would do much to improve FET’s core operations, given the firm’s operational execution has been erratic over the past couple years,” said John Kim, a Merrill Lynch analyst.He was also skeptical that there would be a meaningful increase in roaming revenue for FET as China Mobile preferred partner as the average number of visitors from the mainland to Taiwan was only 35,000 a month in the fourth quarter.