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TCL-Alcatel Sells 49% Of Phone Business

Just a year after TCL Corp inked a licensing agreement with Blackberry, the Chinese-based company has revealed it will sell 49% of its smartphone business to strategic outside investors.

TCL will sell a 49% stake in its communications division to telecom specicalist ‘Unigroup’, Vivid Victory Developments, and an investment company based in southwest China’s Yunnan province.

The news comes nearly a year after TCL privatised its smartphone manufacturing unit, TCL Communication Technology Holdings, on Hong Kong’s stock exchange. At the time of privatisation the unit was valued around HK$7 billion – the unit is reportedly now valued around HK$1 billion.

News of the sale was disclosed in a stock exchange filing on Monday.

Reports state Unigroup and the Yunnan-based Chinese investor will offer their telecoms experience to TCL’s smartphone unit.

TCL Chairman, Li Dongsheng, states the nature of the sale implies TCL – who manufacture phones under BlackBerry, Alcatel and its own names – has no intention of leaving the mobile communications business, noting that mobile services remain a crucial part of its broader business strategy.

Blackberry Motion

Whilst TCL is heralded one of China’s leading TV brands, Dongsheng states the company is trying to maintain a balance within its electronics portfolio:

“Even though the [mobile] business is losing money, we are constantly looking for a balance, and thus the communications business is something we can’t give up”

“Right now smartphones and smart TVs have many similar functions. Many of their applications are also similar”.

Reports state TCL is currently pursuing a strategy which will bring in strategic investors for many of its non-core units, as it endeavours to improve commercial performance.

Despite being one of China’s earliest smartphone manufacturers, the company has suffered in recent years amidst strong competition.

Unit sales (mostly cellphones) from TCL Communication fell 36% to 21 million units during the first half of 2017, and company revenue dropped 26% to 6.87 billion yuan (about US$1 billion).

TCL posted a net loss of 852 million yuan (about US$129 million) for the period.

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