China Mobile Communications Corp., the world's biggest cell-phone company, says on January 22, 2007 that it has signed an agreement for the purchase of 89% shareholding in Paktel Limited, Millicom's Pakistan unit. This is the first international acquisition of strategic importance made by China Mobile.

The transaction implies an enterprise valuation for Paktel Limited of US$460 million. According to China Mobile, this acquisition is expected to be finished by February this year after the deal is approved by the regulatory body of the Chinese government.

Mobile-phone subscribers in Pakistan more than doubled in five of the past six fiscal years to 46 million, or 28 percent of the country's population, at the end of November 2006, according to the Pakistan's telecommunications regulator. China Mobile must have seen the tremendous growth and the market's potential to grow in Pakistan in coming years and may think Pakistan is a good place to start its international investments.

China Mobile, based in Beijing, will pay $284 million to buy 89 percent of Paktel from Millicom International Cellular SA. The acquisition will allow China Mobile to export the marketing tactics and technology it developed in the rural areas of China, the world's largest market by users. The so-called enterprise value of the transaction is $460 million, including debt, the Millicom statement said. China Mobile failed in July last year to buy Millicom, which has networks in emerging markets including Latin America, Asia and Africa.

As the fifth-largest of the Pakistan's cellular operators, Paktel had 1.38 million customers at the end of November, compared with an estimated 1.6 million at the end of October, the regulator said. Millicom, a Luxembourg-based cellular operator with networks in 16 developing nations, said on Nov. 13, 2006 it wanted to sell its Pakistan unit Paktel as soon as possible after concluding it won't get the return on its investment because of challenging business conditions in the nation's wireless market and frequency interference issues.

The Chinese government last month said technology companies should invest more in African and Southeast Asian nations with which the country is deepening ties. An industry expert said that this purchase is a significant breakthrough by Chinese operators in the exploring of foreign markets, a sensible move with the times of global integration.

Shares of China Mobile rose 1.6 percent to HK$71.95 in Hong Kong on Monday as the midday breaks, compared with 1.2 percent gain in the Hang Seng index.

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