China Mobile to Buy Stake in Taiwanese Operator

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China Mobile plans to buy a stake in Taiwan's Far EasTone Telecommunications.

China Mobile, the world's largest mobile phone service provider, will pay NT$17.78 billion (US$527.9 million) for a 12 percent stake in Far EasTone, the companies said Wednesday.

The two companies also signed a strategic agreement to work together on new businesses, roaming, and to jointly make telecommunications-related purchases.

China Mobile said the deal gives it the ability to provide comprehensive coverage as communication grows between China and Taiwan. It's the first such deal between a Chinese network operator and a Taiwanese operator.

It was the second major China-Taiwan deal in a day and shows how much relations between the two have improved since Taiwan President Ma Ying-jeou was inaugurated in May of last year. His party is pro-Beijing, while the previous party in power was pro-Taiwan independence.

Taiwan and China separated in 1949 amid civil war. Beijing has threatened to take the island by force if it moves toward formal independence.

Earlier Wednesday, Taiwanese chip maker United Microelectronics said it will buy China's He Jian Technology in the first deal of its kind between the two places.

The new government in Taiwan has improved relations by working with China to implement the first regular direct flights between the two places since the civil war ended and a series of other initiatives to boost trade and tourism between the two places.

China Mobile said another reason the share purchase made sense for it is because it can better explore future technological trends in the mobile communications market, and accumulate technological and operational expertise in 3G (third generation) and future technology, areas in which the Taiwanese market is more developed than that in China.

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