Caixin
Oct 23, 2017 06:26 PM
BUSINESS & TECH

Unicom Floats Into Cloud With Tencent, Alibaba

Unicom was the first telecoms firm chosen to join Beijing's mixed-ownership reform plan. The company was ordered to sell a strategic stake to private partners, who are then meant to help the state-owned enterprise develop more commercial-oriented offerings. Photo: Visual China
Unicom was the first telecoms firm chosen to join Beijing's mixed-ownership reform plan. The company was ordered to sell a strategic stake to private partners, who are then meant to help the state-owned enterprise develop more commercial-oriented offerings. Photo: Visual China

Unicom Group, the second largest of the nation’s three wireless carriers, announced separate new initiatives with internet giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd., in its first projects since rolling out a plan to become more dynamic by working with private sector partners.

Both initiatives will come in the cloud computing space, which allows people to compute and store information using off-site servers operated by independent third-parties. Tencent and Alibaba are both aggressively developing such cloud-related services, while Unicom owns the necessary infrastructure to operate such services.

Unicom took on Tencent, Alibaba and 12 other partners in August as part of Beijing’s mixed-ownership reform pilot program designed to make big state-owned enterprises more dynamic by pairing them with more nimble private sector firms. In exchange for their participation, the private sector companies also got to buy strategic stakes totaling 35% of Unicom’s Shanghai listed unit.

“This is the first major project of the collaboration,” Unicom said in a posting on its microblog on Friday announcing the Tencent project. “It is also a strong uniting with Tencent after the mixed-ownership reform plan, and is the first step of ushering in deep, strategic cooperation.”

Unicom disclosed the Alibaba project in a separate but similar announcement on its microblog the same day.

The collaboration deal with Tencent contains three specific areas of cloud computing. The first will follow a “public cloud for everyone” approach and offer general data center and cloud computing products and services. The second involves the development of specialty cloud products and services, and the third area covers products and services for cloud security.

The Alibaba plan described the development of a similar suite of products and services.

Unicom was the first telecoms company chosen to participate in Beijing’s mixed-ownership reform plan, alongside firms from a range of other industries. Each must craft a plan to sell strategic stakes in itself to private sector partners, who then are supposed to work together to make more commercial-oriented products and services.

China’s massive state-owned enterprises are the legacy of its socialist past, and are often slow-moving and bureaucratic as they operate in state-granted monopolies like telecoms services. As part of its drive to make those corporate giants more commercially viable, Beijing has also ordered them to slim down and simplify their structures, a task that Unicom has also already begun.

Contact reporter Yang Ge (geyang@caixin.com)

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