Unicom starts campaign to expand market

Wang Chuandong

CHINA United Telecommunications Corp (China Unicom), the country's only rival to China Telecom's supremacy, will use the long-awaited opportunity offered by the government to expand its business this year as new investment measures are applied.

"Our goal is an aggressive goal and that is to amplify our business this year, driven by a favourable operating climate created by the government and the market," Wang Jianzhou, executive vice-president of China Unicom, told China Daily yesterday.

A new financing mode was introduced by China Unicom yesterday when a frame agreement for equipment purchase from Ericsson was signed. The deal concerns equipment for global systems of mobile telecommunications (GSM).

According to the agreement, Ericsson will supply GSM equipment, accessories, and corresponding system software. China Unicom has three years to pay for the equipment and payments each year will depend on the number of subscribers to the new system.

Zhang Xiansheng, executive vice-president of Ericsson (China) Corp, said it is a win-win strategy which might be effective for financing investments in China's telecommunications sector.

"It's something like a mortgage, rather than the former investment method called China-China-Foreign (CCF)," said Wang.

The CCF mode, suspended by the government, involved first moving capital into a Chinese-foreign joint venture, which in turn injected the funds into a Unicom project for a share of the latter's revenues.

"The final results of CCF will be released soon," Wang said.

But he did not elaborate on how to deal with the already signed 45 CCF-style projects.

China Unicom, established in 1994, has been struggling to survive because of lack of capital and governmental support, especially under the fierce competition brought about by giant China Telecom.

The situation has improved this year when high-ranking officials, including Premier Zhu Rongji and Information Industry Minister Wu Jichuan, have pledged to provide policy support to China Unicom, some even more favourable than to China Telecom.

The company is allowed to participate in the CDMA (code division multiple access) cellular network, a US-favoured mobile system compared with European GSM.

(China Daily)

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