China's National Development and Reform Commission (NDRC) has given approval for a pilot program involving opening investment in China Unicom to the private sector, to evaluate transitioning to a mixed ownership model for the market's state-owned operators.
In an announcement, Unicom confirmed that the NDRC has given in-principle approval for the pilot program.
But the details of the pilot – such as the identities of the private investors, pricing terms and percentage of shareholding to be allocated - will still require approval from various ministries.
While media outlets including the South China Morning Post are reporting that Alibaba and Tencent are expected to lead the private investment in China Unicom, the operator stressed that the company has not entered any legally binding agreement with any potential investors. But the company did not explicitly deny that negotiations with the internet giants are underway.
“[Unicom's controlling shareholder] is not aware of the source of information in those media reports and has not entered into any legally binding documents, including framework agreement or subscription agreement, with any potential investor,” the company said.
The Chinese government is conducting the pilot as part of plans to evaluate opening China's telecoms sector up to private investment to reform the ownership structure and competitiveness of Unicom as well as rivals China Mobile and China Telecom.
Unicom was selected for the pilot because it is the least profitable of China's big three operators.