China and Taiwan have long been separated by political differences but relations between the two sides have improved dramatically in the past year. Whether the deal receives regulatory approval on both sides will be a test of the new cross-Strait détente.
The Financial Times reported both sides are hopeful of regulatory approval because the deal ‘involves no control and no management rights’, according to one person familiar with the deal, who added that the two sides had been in discussions since last May.
The companies also agreed to set up a joint venture in China to tap into increasing cross-Strait travel resulting from the direct travel links that opened between Taiwan and China last year.
The new joint venture company will be 51% owned by China Mobile.
What is not mentioned in this straight report is the elephant in the dining room.
China Mobile is stuck with the locally developed TD-SCDMA which, while totally admirable in keeping China from having to pay extortionate royalties. The problem is that the system does not, as yet, work well enough and the handsets are, politely, clunky. In a mobile fashion market this is not a good place to be. Undoubtedly China Mobile has plans for polishing up the product before launching to the electronic fashionistas of Taiwan.