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To: Jack Bridges who wrote (99010)	5/11/2001 10:28:34 AM
From: JohnG	Respond to of 152472

UPDATE 1-China Unicom sees 100 mln subscribers by 2005 May 10, 2001 07:03:00 AM ET (Adds details) By Edwin Chan SHANGHAI, May 10 (Reuters) - China Unicom Group aims to have 100 million mobile subscribers by 2005, 40 million of them on a new CDMA network now under construction, a senior company executive said on Thursday. "We think that, currently, the GSM network will reach its capacity of about 60 million subscribers in two to three years time," vice president Li Zhengmao told Reuters on the sidelines of an investment conference in Shanghai. From 2003, subscriber growth would mainly be driven by new users on the code division multiple access (CDMA) network, which carries more data than the current global system for mobile communications (GSM). Unicom, China's second largest mobile phone operator, estimated it would have 100 million subscribers by 2005, representing 35 percent of the domestic market and up from its current 22.7 percent, Li told the conference. Unicom has dived into the first phase of CDMA construction, using technology patented by Qualcomm Inc (QCOM), which should be completed by the end of the year and cost about 20 billion yuan ($2.42 billion), Li said. China's mobile phone carriers, which collectively boast nearly 100 million customers, now rely almost exclusively on the GSM standard that predominates in Europe and much of Asia. Qualcomm touts CDMA as a more efficient technology. China Unicom is expected to start offering CDMA services by the end of this year or early next year and the first phase would have a capacity for 13.3 million subscribers, Li said. "The strategy we would like to take is to position CDMA as a premium service and position it to high-end customers, rather than to a mass market," he added. Unicom was scheduled to sign multi-million dollar contracts to buy CDMA network equipment from at least seven telecoms equipment suppliers in late April, but the signing ceremony was cancelled at the last minute, industry sources said. The would-be suppliers include Sweden's LM Ericsson Telephone Co (ERICY) and a unit of Canada's Nortel Networks Corp (NT)(NT). Li said on Thursday more details on the contracts would be announced soon. "We've already agreed on CDMA contract deals. We're just waiting to sign these agreements," he told Reuters without elaborating. FUNDING Li reiterated that Unicom retained the right to acquire part of its parent's future CDMA network at an "appropriate" time. "This (listed) company, in future has the exclusive option to acquire CDMA network," Li said. China Unicom's parent China United Telecommunications Corp, which is responsible for building the CDMA network, was pondering financing possibilities, including bank loans, internal cashflow and a domestic share offering. Li said the parent could issue A shares to raise money, but the listing vehicle would not hold the 18-province GSM network nor the future CDMA web. Another possible source of funds was the potential acquisition by China Unicom of its parent's GSM network, although Li declined to put a price tag on it. REUTERS © 2001 Reuters