Vodafone’s China Stake

Vodafone Group agreed to invest $2.5 billion in China Mobile, gaining a toehold in China in return for helping the country’s biggest publicly traded cellular phone company buy seven networks. China Mobile will use the money to help fund the $34-billion acquisition of networks in cities such as Beijing and Shanghai, which will bring it an estimated 17.3 million customers by the end of 2000. Britain’s Vodafone, the world’s biggest mobile phone company, said it also will explore developing a standard for data and voice transmission with China Mobile. Less than 5% of China’s 1.2 billion people use mobile phones. Vodafone will gain a 2.6% stake, based on China Mobile’s current $96 billion market value, before a planned share sale to fund the networks acquisition. Vodafone American depositary receipts rose 81 cents to close at $37.06 on the NYSE.