China Telecom, Unicom Admit Fault in Antitrust Case, Caixin Says

China Telecom Corp. and China Unicom (Hong Kong) Ltd. admitted fault in a broadband access antitrust case, Caixin Online reported, without saying where it got the information.

The two Chinese phone companies told the National Development and Reform Commission they will change certain practices and may agree to a settlement, Caixin said, without giving details.

The investigation may result in “billions of yuan” of fines, state-run China Central Television reported Nov. 9, citing Li Qing, deputy director-general of the NDRC’s department of pricing supervision. The case is the first antitrust probe against state-controlled companies taken by a Chinese agency, Frank Schoneveld, a Shanghai-based partner at law firm McDermott Will & Emery, said this month.

China Telecom is cooperating in the investigation, Jacky Yung, a Hong Kong-based spokesman, said by phone, reiterating a Nov. 10 comment. Unicom doesn’t have additional information about the investigation, said Sophia Tso, a Hong Kong-based spokeswoman. Li Pumin, a Beijing-based spokesman at the commission, didn’t immediately respond to two calls made to his office seeking comment.

China Telecom, the country’s biggest provider of broadband Internet services, fell 1.9 percent to HK$4.71 at close of trading in Hong Kong. Unicom, the second biggest mobile carrier, rose 1.1 percent to HK$16.78.

China United Network Communications Corp., Unicom’s broadband unit, is giving the commission details on pricing, volume and sales for its bandwidth-leasing business last year, the parent company said on Nov. 9.

China Telecom’s services are “strictly in accordance with the relevant laws and regulations,” it said on Nov. 10.

--Mark Lee, with assistance from Edmond Lococo. Editor: Nathaniel Espino, Subramaniam Sharma.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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