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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Ramsey Su who wrote (36350)	7/21/2003 3:51:24 AM
From: TobagoJack	Read Replies (3) of 74559

Unicom GSM additions decline Saturday, July 19, 2003 technology.scmp.com HUI YUK-MIN A continued slowing in subscriber growth for China Unicom's GSM network last month and a rebound in its CDMA pickup has raised concerns among market-watchers. ABN Amro analyst Helen Zhu said the latest statistics released by China Unicom showed the CDMA (code division multiple access) service was growing at the expense of the GSM (global system for mobile communications) network. "Not surprisingly, GSM additions continued to slow. We think the declining GSM additions is a direct result of both CDMA [growth] and the migration of existing customers from GSM to CDMA," Ms Zhu said. On Thursday, China Unicom said it added 773,000 new GSM users last month, substantially behind the monthly average of 1.03 million users in the first half. It also represents a 6.5 per cent fall from May and was the third consecutive month of decline in growth. However China Unicom's CDMA subscriber numbers grew by 760,000 last month - up 19 per from May. "We believe growth in CDMA subscribers was stimulated by the launch of CDMA?x services [on March 28 in major cities] and the CDMA prepaid [on April 10 in several provinces]," said Jenny Szeto of Daiwa Institute of Research (Hong Kong). Having signed up 3.7 million users for its CDMA network in the first half, China Unicom is still 7.7 million short of its 11.4 million full-year target. Analysts believe the carrier's pending nationwide launch of a prepaid phone card for its CDMA network - a product that targets lower-end users - will help stimulate subscriber growth in the second half. However mosts analysts regard an 11.4 million full-year target as hard to achieve. After seeing its shares surge 31 per cent in the past two months, and trading at a premium over its Asian and emerging market peers, Merrill Lynch believes the stock's upside is limited. The shares rose 0.89 per cent to $5.65 yesterday.

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