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Number of CDMA Users Growing
China Unicom is reporting rapid customer growth in its CDMA (code division multiple access) network in the last two months.

Insiders said the growth is the result of China Unicom's efforts to focus less on high-end customers and more on the mass market.

The shift in strategy was welcomed by China Mobile, the country's dominant mobile carrier. It was worried that CDMA would eventually erode its controlling shares in the high-end users.

China Unicom officials said CDMA users surpassed 1 million at the end of May. In July, it started adding customers at a rate of more than 15,000 a day.

Shang Bing, company vice-president, said the company is preparing for even more customers.

The high market demand is being fuelled in part by attractive sales promotions by leading home appliances franchises.

GoMe (Guomei), China's top appliances retailer, is providing the Beijing market with a kind of Motorola CDMA mobile phone priced at 780 yuan (US$94). Customers can get a rebate valued at 100 yuan (US$12) from GoMe if their monthly mobile phone bills surpass 100 yuan in the first two months after their purchase.

"GoMe is actually losing money on the promotion, but we are upbeat about CDMA's long-term development and want to help push forward the market," said a manager of GoMe's mobile phone division who refused to be identified. He said GoMe is counting on profits in the long run.

Suning, GoMe's counterpart in South China, is also mulling a promotion plan for CDMA terminals.

But China Unicom's strategy of targeting a wider customer base may be a double-edged sword.

While the strategy is likely to attract more customers to its CDMA network, which provides good voice quality and gives off low radiation, the strategy could also take customers from its other mobile network, which uses technology called GSM (global system for mobile communications).

Company officials acknowledge that it is too early to tell how often potential conflicts between the two networks will arise and whether price wars will regularly occur in the mobile telecom market.

But mobile phone customers can rest assured of one thing: These changes will give them more choices and better service.

( China Daily August 10, 2002)

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