(Yicai Global) April 16 -- China Railway Corp. plans to sell almost half of its stake in WiFi subsidiary Bullet Train Network Technology Co. in a deal that could spurn interest among some of China’s biggest tech firms.
The national rail operator will sell a 49-percent share of the unit for CNY3.05 billion (USD486 million), state-run China National Radio reported, citing an announcement on the China Beijing Equity Exchange’s website. The move is part of the state-owned giant’s plans for a mixed-ownership reform.
“As an operational service company, [China Railway] needs to cooperate with technology firms,” Prof. Li Hongchang of Beijing Jiaotong University said, adding that the company is picking Bullet Train Networks to trial its mixed-ownership reform because the unit runs relatively independently from the group’s main business.
Tencent Holdings Ltd., China’s largest tech firm by market cap, is very interested and will bid for the stake, people familiar with the matter said. However, China Railway General Manager Lu Fudong visited Alibaba Group Holding Ltd.’s headquarters in Hangzhou in November, and expressed his willingness to work with the e-commerce and general internet giant to promote the integration of high-speed rail with online technologies.
China’s fastest train, Fuxing, which runs between Shanghai and Beijing, has featured onboard WiFi since June, but the service is limited to 600 megabytes of free traffic and there is still room for improvement in terms of signal strength and connection speed.