Telstra, China Unicom eye strong links
By Bill Clifford, CBS.MarketWatch.com
Last Update: 3:09 AM ET Nov. 6, 2001
BEIJING (CBS.MW) -- Telstra, Australia's leading telecom carrier, and China Unicom agreed Tuesday to explore cooperation in wireless and fixed-line businesses, voice and data applications, and services aimed at mainland corporate customers.
The companies also plan on "arranging regular senior-level dialogue and establishing working committees," Telstra said after inking a pact Monday night in Beijing with China Unicom, the country's No. 2 mobile operator (CHU: news, chart, profile).
Since the signing of an earlier memorandum of understanding in March, Unicom and Telstra "have worked together closely on CDMA technology consultation and network optimization," Telstra (TLS: news, chart, profile) said in a statement.
Unicom, licensed as China's only CDMA network operator, has nearly completed the first phase of its CDMA network. The network is designed to cover 300 cities with a capacity of more than 15 million users.
Ten equipment vendors, including Lucent Technologies (LU: news, chart, profile) of the U.S., shared in construction contracts worth 12.1 billion yuan ($1.46 billion). Vendors have begun vying for a stake in the project's second phase, expected to be larger than the first, with a capacity expansion of 20 million subscribers, according to the online China Daily. Second-phase construction is to start after the CDMA network begins operating early next year.
CDMA, or "code division multiple access" technology, is a high-speed version of the "global systems for mobile (GSM) communications" standard that is used by most mobile phone companies around the world. Unicom also operates GSM wireless networks in 322 cities throughout the country, serving 36 million users.
Telstra owns and operates both a GSM and a CDMA network in Australia, where it holds a 45-percent share of the market's estimated 10.5 million mobile customers. Telstra has been trying to expand in Asia through acquisitions and ventures such as that with Hong Kong's Pacific Century CyberWorks (PCW: news, chart, profile) to form a pan-Asian Internet protocol backbone network.
Telstra's agreements with Unicom do not involve equity commitments. Based on the latest MOU, the companies will discuss the role of telecom operators in providing services during Olympic Games.
Telstra will be sharing with Unicom some of its experience gained in the Sydney Olympic Games. With Beijing hosting the 2008 Games, Unicom could benefit from lessons Telstra learned during the Sydney Olympics in 2000.
In Sydney, shares of volume leader Telstra shares ended unchanged from the previous day at A$4.86, while the S&P/ASX 200 index rose 1.8 percent to 3,285.10, its highest since Sept. 5.
In Hong Kong, shares of China Unicom (HK:0762: news, chart, profile) fell 1.9 percent at HK$7.70. The benchmark Hang Seng Index declined 0.72 percent, or 74.67 points, to 10,356.05.
Bill Clifford is Asia bureau chief of CBS.MarketWatch.com.
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