Telefonica aims to increase its presence in the Chinese market by acquiring up to a 10 percent stake in the country’s second largest mobile operator China Unicom, reports the Financial Times (FT). Telefonica chairman Cesar Alierta told the publication that the company is “very well placed” to enter a strategic partnership with China Unicom, which would be completed alongside the planned large-scale restructuring of the country’s telecoms market. Telefonica currently has a 7.2 percent stake in China’s second largest fixed-line network, China Netcom, having upped its holding from 5 percent in January. Under the Chinese government’s consolidation plans, revealed last month, China Unicom is set to buy China Netcom in an exchange deal, valued at around US$56.3 billion. The deal will dilute Telefonica’s stake in the merged firm to roughly 3 percent, but the Spanish-based operator claims it could help China Unicom integrate fixed-line and mobile operations. Alierta’s comments follow earlier statements this week that his company is not planning on increasing its 10 percent stake in Telecom Italia in the near future.

The FT report notes that SK Telecom, South Korea’s largest mobile operator, also has a 6.6 percent stake in China Unicom that will be diluted to about 4 percent in the enlarged company. Vodafone is currently the only other western firm which has a holding in a Chinese operator, with a 3.2 percent stake in China Mobile.