Reborn since 1993

Chapter 841: Snake Swallowing Elephant VS Taker

Lu Hongliang said to Wu Ying that no matter whether the news was true or not, UTStarcom had to start preparing in advance. In case it was true, they had to be prepared to deal with it.

Even more so, is it possible for UTStarcom to go one step further and become the industry leader from the perennial second place in the domestic mobile phone industry?

After all, who wouldn’t want to be the number one? But everyone at UTStarcom understands that, under normal circumstances, it will almost never be possible for them to surpass PHS!
The technology, patents, and core components such as chips of domestic PHS mobile phones are all in the hands of Dongling Hi-Tech, the parent company of Xiaolingtong mobile phones. How can UTStarcom surpass the other company?

But the past is the past, and now a huge fortune has appeared in front of UTStarcom, which is to swallow up the Xiaolingtong mobile phone with a small amount of money!
Wu Ying only needed to exchange a glance with Lu Hongliang and immediately understood what he was thinking.

"Call all UTStarcom executives to a meeting immediately!"

"besides……"

“Contact SoftBank and ask Masayoshi Son to attend the meeting by phone. This is the most important moment for UTStarcom!”

Wu Ying also knew that UTStarcom alone would not be able to take over the PHS market, but Starcom also had a backer and could attract people.

When UTStarcom was founded, Masayoshi Son invested 30 million US dollars in UTStarcom because of his relationship with Lu Hongliang. Now SoftBank is the major shareholder of UTStarcom with a % stake.

UTStarcom cannot take over PHS, but if it can get support from SoftBank, it will be a different story. Now is the time when SoftBank is at its peak, and its investment in Yahoo is making great strides in the global Internet industry!
At SoftBank, Masayoshi Son is about to meet with several Japanese securities companies to discuss listing Yahoo Japan on the Nasdaq, which can be understood as a listing on the Japanese version of the Growth Enterprise Market.

That's right, Yahoo Japan, which was just established last year, will be listed in Japan this year. This is the speed of the Internet. There is no overnight wait. It would be great if it could be established today and listed in the evening.

The reason why it can grow so fast is of course due to the strong performance of Yahoo America. The outside world predicts that Yahoo will become the first website in the global Internet industry to have a market value of over 10 billion US dollars!

Thanks to the strong performance of Yahoo America, Yahoo's brand awareness has soared around the world. This is the benefit of having a big brand behind you.

Yahoo Japan will naturally also benefit from it, and its reputation in Japan's technology industry will soar. Masayoshi Son is ready to strike while the iron is hot and bring Yahoo Japan to Japan's Nasdaq stock market to reap the dividends first.

Japan is still the world's second largest economy and has not yet completely fallen into the lost three decades. As long as Yahoo Japan goes public, it will represent the face of Japan's Internet industry and the representative of Japan's Internet technology. How can its stock price not rise?

In the past, Yahoo Japan’s stock price reached 50 billion US dollars at its peak.

Apart from anything else, Masayoshi Son's vision and courage are indeed unique, especially when it comes to seizing opportunities, which is extremely exquisite. Although sometimes, the opportunity is seized but the cards are bad, leading to failure, his courage is absolutely sufficient.

Originally, Masayoshi Son was about to go out, but his assistant suddenly came in and reported that UTStarcom and Lu Hongliang called him.

"Xiaolingtong is for sale?"

Hearing the news from Lu Hongliang on the phone, Son Masayoshi, who had seen a lot of ups and downs, was surprised, "Where did this news come from?"

Masayoshi Son is certainly no stranger to the Xiaolingtong mobile phone. Now in cities like Tokyo and Osaka in Japan, the most popular mobile phone is not Sony, Sharp, Panasonic, Kyocera and the like, but the Xiaolingtong mobile phone represented by Nippon Telephone and Telegraph Company, which is selling like hot cakes in Japan!

Even the Japanese Cabinet and the Japanese Ministry of Communications have become less concerned about the PDC standard that Japan was originally planning to promote as a competitor to GSM and CDMA. Instead, they have begun to support the PHS telecommunications technology, which is currently "popular" in the world, with more than a dozen countries and regions, and is expected to have more than 100 million users worldwide in the future!
Even Masayoshi Son, when he first heard that Dongling Hi-Tech was going to sell its PHS phones, thought to himself, is someone teasing them?

"I don't know whether it's true or not, but I think UTStarcom needs to be prepared, so I want SoftBank to join this meeting!" Lu Hongliang said to Masayoshi Son.

After hanging up the phone, Son said to his assistant, "Tell those brokerage firms to postpone negotiations with them!"

"This is a golden opportunity. As long as we acquire the Xiaolingtong mobile phone, UTStarcom will become the largest PHS mobile phone brand!"

“It is also the world’s third largest mobile phone shipper!”

"Is this news true or false?"

"I can't figure out why Dongling Hi-Tech wants to sell Xiaolingtong. If they do, I don't know how much they would pay. Can we afford it?"

When a group of UTStarcom executives heard Wu Ying mention that Dongling Hi-Tech was going to sell Xiaolingtong, their first thought was that it was like a snake swallowing an elephant!

But some Starcom executives wondered why Dongling Hi-Tech sold its cash cow, PHS, and suspected there might be some fraud involved.

Masayoshi Son, who was sitting next to the conference call in Japan, kept listening to the translator and translating what the Starcom executives said.

“It’s not clear yet!”

"But if this is true, I think news will come out soon!" Wu Ying ended the internal dispute of UTStarcom. If they continued to guess, they would never know when the news would come out.

"The most important thing now is, if the news is true, what should UTStarcom do?" Wu Ying asked. It seemed that she was asking Starcom's executives, but in fact she was asking Masayoshi Son.

"How much will it cost to acquire Xiaolingtong mobile phones?" Masayoshi Son was also aware of this, so he asked the most crucial question directly without any nonsense.

Wu Ying and Lu Hongliang exchanged a glance, and then Lu Hongliang, who had the closest relationship with Masayoshi Son, spoke up, "We don't know yet, but conservatively speaking, the amount may be beyond imagination, and it may even exceed 10 billion US dollars!"

In fact, UTStarcom was just guessing how much the Xiaolingtong phone would be sold for, because there had never been a precedent for such a transaction!

Moreover, the acquisition of Xiaolingtong mobile phone does not depend on how much Dongling Hi-Tech offers, but more importantly, how many investors are willing to bid for Xiaolingtong.

Otherwise, even if Dongling Hi-Tech offered one dollar for Xiaolingtong, once a few acquirers started bidding, it would only take a few rounds to raise the acquisition price to the sky.

"hiss"

But even this initial price made people inside UTStarcom gasp in shock. It was truly a astronomical price.

Masayoshi Son's breathing on the other end of the phone also became a little heavier, and then Wu Ying and Lu Hongliang vaguely heard the voice of Masayoshi Son talking with SoftBank executives.

Wu Ying also spoke up at this time, "Acquiring Xiaolingtong mobile phones does indeed cost a huge amount of money and involves great risks, but...

If UTStarcom can acquire the Xiaolingtong mobile phone, it will be listed on NASDAQ as the world's third largest mobile phone manufacturer!

Now the market value of Nokia, the world's largest mobile phone shipper, is around 30 billion US dollars. How high will UTStarcom's market value be by then?"

Wu Ying's move made UTStarcom executives and Masayoshi Son silent for a while.

Yes, it seems that the acquisition of Xiaolingtong is very expensive, but what if the acquisition is successful? To what extent will the valuation of UTStarcom, which is applying for listing, soar?
Once the listing is successful, won’t the money spent be recovered or even a huge profit be made?

When it comes to spending money, Masayoshi Son is professional and always decisive, without any hesitation. Even though this time the spending was far more than before, he did not hesitate at all.

"As long as the news is true and Dongling Hi-Tech is willing to sell PHS, UTStarcom will start to make an offer to Dongling Hi-Tech!"

"SoftBank will look for overseas consortiums to provide acquisition funds for UTStarcom!"

Son's words made Wu Ying, Lu Hongliang and others very happy, but then Son made another request.

"But SoftBank also has a requirement. Before starting the acquisition, SoftBank must invest another sum of money in UTStarcom. SoftBank requires 51% of UTStarcom's equity!"

Masayoshi Son wants to obtain the controlling stake in UTStarcom. Previous investments in UTStarcom were dispensable to Son, and he did not demand controlling stake.

But now, SoftBank has to raise huge funds to help Starcom with the acquisition, and after it goes public in the future, Starcom may become a giant company. Masayoshi Son is unwilling to miss it. Otherwise, what is the point of SoftBank making such a big fuss!
Wu Ying and other Starcom executives including Lu Hongliang looked at each other. Finally, Wu Ying gritted her teeth and nodded in agreement.

……

"Sources close to Tanglin Hi-Tech revealed that Tanglin Hi-Tech may indeed sell PHS, the largest mobile phone brand in the mainland!"

"Some experts analyzed that due to the impact of the Southeast Asian market, Dongling Hi-Tech, which has a large proportion of foreign trade orders, has also been seriously affected. Dongling Hi-Tech may be seeking transformation and therefore selling PHS phones!"

"Currently, the spokespersons of the Economic and Trade Commission, the Ministry of Commerce, the Ministry of Electronic Information, the Post and Telecommunications Department, the Foreign Exchange Department and other departments have not made any comments on the rumors that Dongling Hi-Tech is selling PHS phones!"

Almost immediately after the news report in the Yanjing Business Daily, all kinds of news began to be reported by major domestic media outlets. Because the news was so explosive, countless people were confused.

Also confused was ZTE, the largest PHS base station manufacturer today. ZTE's chief executive, Hou Weigui, only learned about the incident after seeing the news on TV.

As a key player in the PHS industry chain in mainland China and one of the companies that benefited the most, the impact on ZTE if Dongling Hi-Tech were to sell off PHS would be unimaginable.

Among the four major switch giants in China, the four giant Chinese companies, ZTE is currently the leader. Switches, PHS base stations and ZTE-branded PHS mobile phones are three major businesses that have made ZTE flourish.

(End of this chapter)