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China Unicom Expands Business
China United Telecommunications Corp (China Unicom) announced Friday that on June 5, the number of its mobile telecom network subscribers had reached 10.1 million, 14 per cent of the total domestic market.
"The number of new subscribers began to leapfrog this year," said Lu Jianguo, vice-president of the company. "More than 32.5 per cent of the new mobile phone subscribers chose China Unicom in the first quarter of the year. In some areas, this figure is even higher than 50 per cent."
China Unicom benefits from encouragement of the government. A senior official with Ministry of Information Industry said earlier that China will allow more telecom operators to compete in the field and protect fair play.
"Our subscribers will be somewhere between 15 to 18 million by the end of this year," said Lu. "We will control 35 per cent of the domestic market in 2005."
Starting in January, subscribers to China Unicom grew at a speed of 200,000 per week.
The company will invest 30 billion yuan (US$3.62 billion) into basic infrastructure this year. Its network covers more than 200 major cities and will expand to 300 by the end of the year.
Internationally, China Unicom has begun business in 20 countries and signed agreements with foreign counterparts in 50 countries to provide international calling services in these countries by the end of the year.
In May, China Unicom started WAP (wireless application protocol) services in 20 major cities. The company said WAP services will be its new revenue pool.
As one of the two mobile telecom operators, China Unicom plays a minor but critical role in the market in the early stage when it was set up in 1994.
The firm now offers long-distance services as well as phone service using Internet protocol, or IP technology which can save up to two-thirds the amount in long distance call fees. It plans to expand IP telephones to 220 cities this year.
China Unicom always gets pressure from the other telecommunications giant, China Telecom, which controls the major market share. "But now, they should feel threatened by us," Lu said.
The company is underway for the initial public offering (IPO) in Hong Kong and New York. Given the ascending trend of its business, many foreign investors are upbeat about the results from the coming IPO.
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