Unicom Calls on Switzerland

Unicom Group has opened a Swiss office as part of China’s drive to boost infrastructure development along the old maritime and land-based Silk Roads, in a relatively rare move for the nation’s insular trio of big state-run telecoms carriers.

China’s second largest carrier by wireless subscribers launched the office in Zurich, Switzerland’s largest city and a leader in global finance, according to a posting on the website of China’s Swiss embassy late last week. In a ceremony to mark the opening, Ambassador Geng Wenbin made reference to the new office’s roll in the “One Belt, One Road” initiative, a signature effort of President Xi Jinping aimed at promoting infrastructure construction in developing nations.

“Promotion of China-Switzerland cooperation in ‘One Belt, One Road’ requires a greater level of interconnectedness,” Geng said. “As one of the world’s important telecoms carriers, Unicom will help to link up international lines, integrate information technology and develop the internet of things and other areas to benefit both countries.”

Geng did not elaborate further on what specific activities Unicom would engage in from the new office. But Zurich’s role as a European and global financial center may mean that infrastructure finance could be part of the equation.

China has spent hundreds of billions of dollars over the last two decades to build up state-of-the-art infrastructure, including an immense network of highways and the world’s largest high-speed rail system. The country has also become the world’s largest wireless market and boasts three cutting-edge 4G networks with more than 1.3 billion users combined.

Having built all that infrastructure, much by homegrown companies, China now wants to export some of that know-how to other developing markets. To encourage such projects, China has set up institutions like the Asia Infrastructure Investment Bank (AIIB) to help finance such endeavors. Beijing is also encouraging infrastructure builders and operators like Unicom to become more active abroad.

Despite their huge domestic market, Unicom and its two domestic rivals, China Mobile and China Telecom, have largely refrained from overseas expansion or other offshore investment to date.

China Mobile has made a few small investments outside the country, all in developing markets. Unicom has also taken on some large foreign carriers as investors in the past, with Spain’s Telefonica S.A. at one point buying 10% of the company. But those have all ended in disappointment, with the foreign investors selling most or all of their stakes after failing to gain any strategic advantage from the tie-ups.

Contact reporter Yang Ge (geyang@caixin.com)