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Share Name | Share Symbol | Market | Type |
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Apple Inc | NASDAQ:AAPL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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10.75 | 6.21% | 183.78 | 183.35 | 184.00 | 187.00 | 182.66 | 186.645 | 163,224,774 | 05:00:00 |
By Aries Poon And Lorraine Luk
TAIPEI-- Hon Hai Precision Industry Co.'s effort to expand beyond contract manufacturing has hit a hurdle after regulators asked that a merger proposal for its two telecom units be resubmitted.
Taiwan's National Communications Commission on Wednesday asked Hon Hai's telecom-equipment unit, which is called Ambit, and its mobile operator, Asia Pacific Telecom, to address legal concerns over a roaming arrangement the proposed merged entity plans with a third-party wireless service provider.
"We understand Asia Pacific Telecom has a strategic alliance on roaming services with a third-party operator. There are legal concerns with this partnership but the application document doesn't address that," the NCC said.
"The companies should clarify our concerns when they resubmit their application, then we will handle the review immediately," the regulator added.
The NCC declined to elaborate on its legal concerns.
The planned merger of Ambit and Asia Pacific Telecom is part of Hon Hai's shift away from its bedrock business of assembling products for Apple Inc. and Xiaomi Inc., a model that renders profit margins razor thin.
The new single company, in which Hon Hai will be the largest shareholder, would be a key step in the contract manufacturer's foray into telecom services. Hon Hai, which is also known as Foxconn Technology Group, aims to offer speedy fourth-generation wireless services locally through the merged unit, which will be called Asia Pacific Telecom.
In September, Taiwan Mobile agreed to be Asia Pacific Telecom's roaming partner, offering wireless service to Asia Pacific Telecom outside the newly merged company's coverage areas. Taiwan Mobile also said it would acquire a minority stake of 3.45% in Asia Pacific Telecom.
The Taipei Times reported Thursday, citing a NCC official, that the NCC has been investigating claims by other telecom companies that Asia Pacific Telecom hasn't built the number of 4G base stations it promised in the merger application. Instead, the report said that Asia Pacific Telecom plans to rely on Taiwan Mobile Co.'s network, even when customers are within Asia Pacific Telecom's coverage areas.
Asia Pacific Telecom, which speaks also on behalf of Hon Hai and Ambit, declined to comment on the Taipei Times report Thursday and said it will resubmit the merger application with supplementary documents as soon as possible. Taiwan Mobile couldn't be reached for comment.
Hon Hai's foray into wireless services also ran into a regulatory obstacle last year. The NCC raised security concerns about the company's plan to use Huawei Technologies Co.'s gear in building the new 4G network. Hon Hai eventually dropped such plans for the application review to proceed.
Write to Aries Poon at aries.poon@wsj.com and Lorraine Luk at lorraine.luk@wsj.com
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