<<The parent company had sufficient resources to finance the development of a CDMA network, >>
China Unicom parent to invest 20 bln yuan in CDMA
HONG KONG, March 27 — China Unicom (HK:0762) said its state-owned parent, China United Communications Corp, will invest 20 billion yuan (US$2.42 billion) by 2002 to build a CDMA network that could accomodate 13.3 million subscribers.
The parent company had sufficient resources to finance the development of a CDMA network, China Unicom's vice president and executive director Li Zhengmao told reporters after an investment conference held by Credit Suisse First Boston on Tuesday.
China Unicom, the number two Chinese mobile phone operator, would operate the CDMA network under a leasing contract and it also had the right to purchase the network from its parent at cost, Li said.
Detailed plans and implementation of the long-awaited CDMA network would be good news for San Diego-based Qualcomm (NASDAQ:QCOM), which owns patents on the CDMA or code division multiple access wireless technology and stands to earn royalties from sales of CDMA network equipment and handsets in China.
Qualcomm has been waiting for years to crack the China wireless market, which is dominated by the rival GSM technology and has seen its shares driven up and down by statements from Chinese regulators and telecoms officials about the issue.
Shares of China Unicom rose 2.91 percent to HK$8.85 in early Wednesday trade. In Nasdaq trade, Qualcomm shares were among the most active counters on Tuesday, surging US$3-1/4 or 5.74 percent to US$59-7/8
(US$ = 8.28 yuan)
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