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To: T L Comiskey who wrote (8767)	10/19/2000 2:50:00 PM
From: Sully-	Respond to of 65232

RE: That cdma stock.... China Unicom to Establish CDMA Trial, Focus on GSM (Update2) 10/19/00 11:05:00 AM Source: Bloomberg News URL: cnetinvestor.com Beijing, Oct. 19 (Bloomberg) -- China Unicom Ltd. President Wang Jianzhou said China's second-largest mobile-phone company will let ''market demand'' determine how it will use a network based on a digital technology developed by Qualcomm Inc. The Chinese government plans to give Great Wall Tele- communications Co.'s network to China Unicom. The network uses Qualcomm's code-division multiple-access technology. Currently, China Unicom uses a rival technology, Global System for Mobile Communications, or GSM. China Unicom will set up a trial using CDMA that will expand Great Wall's capacity for ''good economic efficiency,'' Wang said. ''All the strategies and scale (of CDMA installation) will be determined by market demand,'' Wang said. He wasn't more specific. Great Wall's network has 1 million customers. China Unicom will continue to focus on the development of the GSM network, he said. ''From now on, the major part of our income is from GSM,'' Wang said. A Big Market Qualcomm wants to sell cell-phone chips and license CDMA technology patents in China. There are 65 million cellular phone users in China, the second-largest market behind the U.S. China is expected to become the world's biggest wireless phone market within 10 years. Qualcomm shares rose $1.38 to $76.19 in midafternoon trading after earlier touching $78. Qualcomm spokeswoman Christine Trimble declined to comment. Lehman Brothers analyst Tim Luke said some investors believe equipment orders could be announced by year's end or in the first quarter. ''Sentiment-wise, any commentary with respect to CDMA in China actually being employed in China is likely to be perceived as positive for Qualcomm,'' said Luke, who rates Qualcomm shares a ''buy.'' To make the CDMA network more attractive to customers, China Unicom's parent company, China United Telecommunications Corp., plans to add features to the network, such as a high-speed data service, which is used primarily by business customers. Customers China Unicom's customers more than doubled to 10 million by September from 4.2 million at the end of 1999. It expects to have 29 million GSM customers by 2002. Wang wouldn't say if the Chinese government would sell the Great Wall network to China Unicom or if it would be acquired free of charge. Wang wouldn't say how much money Unicom plans to spend on the CDMA network. The CDMA network will belong to China United and will only be transferred to China Unicom if it proves successful, Wang said. ''I would like to emphasize that the CDMA business is not held by the listed company. CDMA is held by the parent company. Any risks will be born by the parent company,'' he said. Earlier this week, Qualcomm joined China Unicom and a Chinese equipment maker to produce a cellular phone based on Qualcomm's wireless standard. Ö¿Ö