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To: Dealer who wrote (25216)	7/13/2000 8:44:24 AM
From: Dealer	Read Replies (1) \| Respond to of 35685

QCOM--Thursday July 13 5:25 AM ET China Military to Give Up Mobile Business to Unicom By Matt Pottinger BEIJING (Reuters) - China has ordered the military to surrender control of its commercial cellular telephone networks and hand them over to China United Telecommunications Corp, a senior official said on Thursday. The order, yet to be implemented fully, would strengthen China Unicom, the state-owned parent of recently-listed China Unicom (Hong Kong) Ltd (NYSE:CHU - news) (0762.HK), by giving it control of a rival. China Unicom Ltd's shares soared on the Hong Kong stock market on news of the transfer, up more than five percent to reach a record high of HK$20.55. ``All mobile network businesses will be transferred from the military to China Unicom,'' Jiang Shaobing, deputy director of planning at the Ministry of Information Industry, told a news conference. For years, an engineering wing of the People's Liberation Army (PLA) has held a stake in Great Wall Telecom, a mobile phone joint venture which runs commercial CDMA-standard phone networks in four cities; Beijing, Shanghai, Xi'an and Guangzhou. The networks, while small, are a glaring exception to a two-year drive by President Jiang Zemin to disentangle the military from commercial enterprises. The PLA resisted plans a year ago to transfer the networks to China Unicom, and even went on to craft a new joint venture, called Century Mobile Communications, which built networks in Hebei province in the north and in the eastern city of Tianjin. Pla Networks Must Go Jiang Shaobing's statement on Thursday was the first official sign of a renewed drive to force the PLA to relinquish control of the networks. ``According to the current policy, no military units are allowed to have this kind of business operations,'' he said. ``That's why Great Wall's networks are being transferred to China Unicom.'' Asked whether Century Mobile Communications would also have to hand its business to China Unicom, he simply said ``all'' networks would have to comply. ``The transfer process is still underway,'' he said. While China Telecom no longer holds a stake in Great Wall, other state-owned partners have taken its place. China Unicom and China Century executives could not be reached immediately for comment. Possible Boost For Qualcomm The move may also provide a modest boost to San Diego-based Qualcomm Inc (NasdaqNM:QCOM - news), which sells chipsets for CDMA handphones and earns royalties on CDMA equipment. In May, China Unicom dealt Qualcomm a heavy blow by announcing it had abandoned plans to build current-generation CDMA networks like those Great Wall and Century Mobile run. But if the government order is obeyed and China Unicom wins control of the CDMA networks, it might use them as a base to develop future generation services which are in tune with technology developed by Qualcomm. Jiang told reporters the government was ``studying'' the possibility of allowing Unicom to roll out experimental future-generation CDMA networks. The vast majority of mobile phone networks in China, including those belonging to China Unicom, use a rival European standard known as GSM (global system for mobile communications). The PLA-backed CDMA networks have a combined subscribership of only about 200,000 versus 56 million GSM subscribers.