Tencent Eyes Bullet Train Wi-Fi

Social media giant Tencent Holdings is looking at the burgeoning Wi-Fi business on China’s fast-running bullet trains in hopes of extending its access to the massive data of urban travelers.

Zhang Wei, vice president of Tencent’s Internet Plus division, told Caixin Thursday that the company will bid for a stake in Bullet Train Networks Technology Ltd., an onboard Wi-Fi provider wholly owned by state railroad operator China Railway Corp. (CRC).

CRC in early April revealed the plan to sell a 49% stake of Bullet Train Networks in its latest effort to bring in private money to cut down on mounting debt.

Bullet Train Networks is the sole operator of Wi-Fi services on select bullet trains.

Zhang said Tencent is very interested in the Wi-Fi business on bullet trains as it provides valuable access to a large number of users. It is also an important segment of the mobile internet market, said Zhang.

Tencent will actively bid for the stake, he said.

The CRC has offered free Wi-Fi to passengers on selected high-speed trains. The railroad operator is eagerly seeking for-profit models to cover the cost of that service, said a CRC official.

The CRC source told Caixin that the company prefers to sell the stake to one company or a consortium formed by partners.

Caixin learned from knowledgeable sources that e-commerce giant Alibaba Group Holding also showed interest in the business. In November, Alibaba Chairman Jack Ma met with CRC General Manager Lu Dongfu to discuss a potential partnership.

The stake sale of Bullet Train Networks marks the CRC’s response to the central government’s call for so-called mixed-ownership reform, which invites private players to get involved in state-owned businesses.

Last year, state telecom operator China Unicom pioneered the reform by selling a 35% stake in its Shanghai-listed unit to 14 investors, including internet giants Tencent, Alibaba, Baidu Inc. and JD.com Inc.

Contact reporter Han Wei (weihan@caixin.com)