Telefónica to double Netcom stake

Spanish telco Telefónica will raise its stake in China Netcom Group Corp (Hong Kong) to 9.9%, strengthening the relationship between the two companies. No financial details of the transaction have yet been released, although on current market valuation the additional stake is valued at around USD540 million. Under the previous arrangement, the pair agreed to cooperate in a number of areas including international business, provision of telecoms services in south China, development of call centres and technology purchasing. According to the Hong Kong business daily The Standard, Telefónica is also planning to take a minority strategic stake in Asia Netcom, the submarine cable arm of China Netcom.