The corporations. They do keep growing, expanding, forming their own blueprint across the planetary landscape, a sleight of hand so crafy some things just get lost in the ether. Not this one though: Fresh from its iPhone deal, China Unicom today took a slice of another iPhone carrier, O2 parent company, Telefonica. (Or perhaps its true to say the two corporations took a slither of interest in one another).
Spanish-owned Telefonica is one of the largest fixed-line and mobile telecommunications companies in the world: 3rd in terms of number of clients (with the acquisition of O2, Movistar and Manx Telecom) only behind China Mobile and Vodafone, and in the top five in market value.
Apple’s brand-new Chinese iPhone carrier partner has agreed to shell out $1 billion for a 0.88 per cent slice of Telefonica. In exchange, as this corporate love-making goes public, the Spanish firm intends increasing its investment in China Unicom by around $1 billion to an 8 per cent stake, from 5.38 percent currently.
There’s more: Expect joint work on network and technology development, shared infrastructure, working together on developing wireless services. and lots of deals on roaming and sharing of “skills”.
The two firms together account for 405 million subscribers right now.
We wonder what the impact of this nesting between the two carriers will have on Apple’s ongoing conversation with China Telecom.
We know that part of the problem Apple’s had with nailing a deal with Chinese mobile telcos has been the latter’s refusal to engage in revenue sharing deals, and some pressure on Cupertino to relinquish control of the App Store. (As we understand it).
Interesting then to note that the world’s largest indie music aggregator, The Orchard, last month sealed a deal with China Telecom to offer music through that company’s wireless service.
Talk continues to favour the notion Apple and China Telecom will reach an iPhone deal in future. Is all the activity – including recent Chinese government moves to promise more action against copyright abuse – simply Apple’s future Chinese partners putting themselves into position to best benefit from Apple’s smartphone salvo.
There’s a degree of symmetry to this proposition: After all, your iPhone was indeed designed in Cupertino – but made in China.