China Unicom, Vodafone to Consider Phone Roaming Pact
Hong Kong, June 13 (Bloomberg) -- China Unicom Ltd., China's No. 2 mobile phone company, said it signed a preliminary agreement with world mobile leader Vodafone AirTouch Plc to enable the phones of each company to operate in the other's territory.
China Unicom, which is in the process of selling stock to the public for the first time, said it agreed with British-based Vodafone to ``consider and evaluate'' the merits of entering into a so-called phone roaming agreement.
``The parties also agreed to engage in future discussions regarding possible collaboration and cooperation in the areas of mobile technology and operations,'' Unicom said. The collaboration could include joint ventures or partnerships in China.
Linking with Vodafone could help Unicom compete with China Telecom Ltd., mainland China's dominant phone company. Competition is a primary concern among investors reviewing Unicom's announcement yesterday that the size of its first-time share sale will be increased 10 percent to $5.05 billion, a record for a mainland company.
``It's a first step for Vodafone to enter the China market,'' said Stellar Lau, managing director of East Asia Asset Management, which manages about $300 million. ``It just gives China Unicom some international exposure, and possibly some international technology.''
China will gradually open its mobile telecommunications market to foreign investment following its entry into the World Trade Organization, expected later this year. Mobile phone use is growing rapidly in China.
Unicom's parent, China United Telecommunications Corp., is considering adopting Qualcomm Inc.'s third-generation mobile phone technology, which the company is currently testing.
Although Qualcomm has encouraged China to adopt its existing CDMA technology, Yang Xianzu, China Unicom's chairman, said yesterday his company prefers for now to focus on the rival GSM standard, which all Chinese mobile phone operators now use. Third generation cell-phone service isn't expected to begin in China for another two years.
China Telecom fell 1.9 percent, or HK$1.25, to HK$64 today. The stock rose 32 percent so far this year.
Jun/13/2000 1:29 ET |
