China Unicom upbeat on subscriber target
(06/19/2002) (China Daily)
China's second largest wireless carrier China Unicom said Tuesday it remained confident of meeting its CDMA subscriber target this year, with cheaper handsets and improved network coverage.
Shares of the company were unchanged Tuesday at a record low of HK$6.85 after falling 2.84 per cent on Monday amid media reports of Unicom's offering incentives to lure users to its CDMA-standard network.
The company, which is leasing from its parent the capacity of CDMA cellular network, intends to sign up 4.6 to 4.7 million CDMA users this year, compared with the 7 million goal of the parent.
China Unicom's branch in Jiangsu Province, jointly with more than 10 mobile phone makers, slashed the prices of CDMA handsets sold in Nanjing, capital of Jiangsu, by an average 40 per cent over the weekend, Xinhua reported earlier.
The market was worried that China Unicom's subsidies for handsets would not only eat into its bottomline but may also pave the way for a price war with its rival China Mobile (Hong Kong), which runs a cellular network based on GSM standard.
A China Unicom official described Tuesday the move in Jiangsu as a promotional measure and said the company would not subsidize for handsets.
Instead, the company has been offering free calling minutes or its free IP calling cards to heavy users, with various branches setting their details of the offer, the official said.
Further improvement in the company's CDMA network coverage and the ongoing upgrade of the network using the higher 2.5-generation mobile technology are also expected to help speed up consumer adoption of the service, the official said.
Prices of CDMA handsets are expected to go down further with increasing adoption, the official said.
The whole group has signed up only 1 million CDMA users since the launch in January including 400,000 migrating from a now closed CDMA network. The company has blamed for the slowness the initial shortage and high prices of handsets.
The market has been concerned about the company's decision to position CDMA as a high-end service in a price-sensitive market. China Unicom, which also runs a GSM network, is allowed to charge less than its rival for this service.
China Unicom announced Tuesday Li Zhengmao, a vice-president and executive director of the company, has resigned and will take up the post of general manager of the Yunnan branch of the parent.
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