China Unicom Sees Net Addition Of 11.4 Million CDMA Users In 03
Monday December 23, 2:53 am ET
HONG KONG -(Dow Jones)- China Unicom Ltd. , the listed company of China's second-largest mobile phone operator, said Monday it expects to chalk up a net addition of 11.4 million code division multiple access, or CDMA, subscribers next year. At an extraordinary general meeting, Chairman Yang Xian Zu said that he expects the 12 original provincial networks owned by China Unicom to acquire a net 8 million subscribers next year.
The nine provincial networks acquired recently from its parent, China United Telecommunications Co. (Q.CUQ) will, on the other hand, see 3.4 million in net new subscribers in 2003.
Yang said the group was planning a domestic bond issue in China.
"We do have this plan...we have submitted our application (for a domestic bond issue)," Yang said.
A domestic bond issue would strengthen the company's balance sheet, he said, adding funds raised weren't intended as capital expenditure for the development of the company's CDMA networks.
The company didn't specify whether it will be the Hong Kong-listed company's mainland-China based units or the parent company that would issue the bond.
Executive Director Tan Xinhui told reporters China Unicom currently has "more than 4 million" CDMA subscribers.
Commenting on the domestic bond plan, Tan added that "it should be the parent company" that will tap the capital market.
China Unicom early this year set a full-year target of four million CDMA subscribers. However, industry observers believed it was overly optimistic, as initial subscriber growth was slow.
Yang said the company has targeted a total of 21.5 million new subscribers next year, in which new subscribers to its global system for mobile communications network are expected to account for 10.1 million, on top of the 11.4 million new CDMA subscribers target.
At present, the company's CDMA network has only post-paid subscribers. Another executive director, William Lo, said the company has finished all the necessary technical standard trials for its planned CDMA pre-paid service.
Its formal launch will depend on when cheaper, lower-end CDMA 1X mobile handsets can start to be mass produced, he said, without giving any more specific of a timeframe.
Fees for its pre-paid service, which targets low-end subscribers, will be fixed at a premium over those for its GSM network in order not to cannibalize that existing low-end service, Lo said.
Yang also said the 10% cut in its network leasing fee paid to its parent will be made retroactive to the start of 2002.
The company's largest expenditure is the fee it pays its parent to lease its CDMA network, according to analysts. UBS Warburg said a 10% reduction in leasing fees in 2002 would likely lift its earnings by 2% and save it HK$125 million.
-By Loretta Ng, Dow Jones Newswires; 852-2802-7002; loretta.ng@dowjones.com
Dow Jones Newswires
12-23-02 0253ET
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