China Mobile has terminated its sale purchase agreement with Taiwan's Far EasTone signed in 2009.
China Mobile attributes the cancellation to the inability to have foreign investment in the Taiwanese basic telecom industry.
According to the company's report, China Mobile and Far EasTone signed a stake purchase agreement in April 2009. China Mobile planned to buy 444 million shares of Far EasTone; however, due to the failure to meet some prerequisites, the purchase agreement has been terminated. Meanwhile, the strategic cooperation agreement signed by the two parties has been voided as well.
China Mobile explained that it planned to cooperate with Far EasTone to provide better services to users who travel between mainland and Taiwan and enterprises which operate businesses on both sides of the strait. It could realize the business expansion of China Mobile and enhance customer loyalty.
However, it has been four years since the signing of the agreement and the deal has still not been approved by the Taiwanese government, which mainland China's government views as illegitimate. Therefore, China Mobile has been forced to give up the stake purchase. The company said once Taiwan lifts the ban for investment in the basic telecom industry, the two parties will re-discuss the cooperation possibility.