China Netcom and Telefonica signed a memorandum of understanding (MOU) to establish a broad strategic alliance. The parties will explore possible areas of strategic co-operation in the areas of:
- Fixed-line, broadband, domestic and international long distance communications
- Domestic and international data services and value added services
- Nationwide mobile voice and data services to individual and corporate customers, as will be allowed within the Chinese regulatory environment.
- The exchange of certain managerial, technical and operational skills and resources.
A Chairmen’s forum, consisting of the Chairmen of both companies, will be established and will meet on a regular basis (at least once a year. Telefonica shall be entitled to nominate a representative to the board of directors (“the Board”) of China Netcom , and the number of representatives that Telefonica is entitled to appoint to the Board shall increase if its ownership stake increases further.
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