Telefonica to increase stake in China Netcom

Spain's Telefonica plans to nearly double its stake in China Netcom from 5 percent to 9.9 percent at a cost of up to $540 million. The investment enables Telefonica to nominate another board member to the company, which recently signed an agreement with Shanghai Media Group for IPTV content for test runs. China Netcom plans to deploy IPTV trials in 20 more cities throughout China in a move to challenge impending China Telecom plans to deploy IPTV. Telefonica's IPTV service, Imagenio, claims 120,000 subscribers in Spain and runs on Lucent's IPTV infrastructure. Telefonica's interest in China Netcom is mostly for VoIP projects, but on the IPTV side of things we could see Lucent coming in as a partner for China Netcom to take on China Telecom and UTStarcom for China's IPTV market.

For more on Telefonica's investment in China Netcom:
- see this article from Light Reading
- and this article from China Tech News

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