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To: Ruffian who wrote (109074)	11/28/2001 12:44:30 PM
From: S100	Respond to of 152472

China Unicom, the second largest wireless carrier in the country, said last Friday it expected nine firms would be able to produce handsets using the CDMA (code division multiple access) standard by the end of this year. The firms are expected to be able to ship 19 million phones using the new standard 2002. China has approved 19 firms to produce CDMA technology handsets. Motorola is the only foreign firm among them, although many local players have overseas joint-venture partners. China Unicom also told analysts during a conference call that it would not initially offer pre-paid CDMA services. Most new customers on the firm's existing GSM (global system for mobile communications) network signed up for pre-paid calling plans, which are usually cheaper than contract plans. The company will price its new CDMA service based on a national standard and does not plan to use the 10 per cent discount, which it is permitted to provide on its GSM network. The company also said it planned to have its CDMA service operate on a positive EBIT (earnings before interest and taxes) basis in its first year. The company said it hopes for an overall mainland cellular market share of 35 per cent by 2005, compared with its current 27 per cent. The CDMA network, said to have a higher voice quality and be safer to use than GSM, will be China Unicom's best weapon in its battle with China Mobile, the country's dominant mobile operator. China Mobile controls 75 per cent of the wireless business market at present. China Unicom had 24.59 million subscribers as of October 20, an increase of 5.3 per cent from the previous month. The company finished the construction of its CDMA network last month after five-months of work. The first-phase network will take in 300 cities and support 15.15 million users. China is the biggest GSM market with 131 million users recorded by the end of September. The number of new customers is growing at a rate of 5 million per month. China Mobile has surpassed Vodafone of Britain, which used to be the world's biggest mobile carrier. Given the fact that only 10 per cent of China's population uses mobile phones, the Chinese market is widely believed to be a promising place for worldwide operators and equipment vendors. Officials from China Unicom said the company was expecting to recoup the investment it has made on the CDMA network within seven years. China Unicom signed a key agreement with rival China Mobile two weeks ago for network interconnection and charge-sharing, a move that finally enables its CDMA users to make calls with customers using the GSM network. To develop the CDMA network, China Unicom awarded contracts worth US$1.46 billion to a handful of domestic and foreign firms in May. Motorola nabbed nearly 30 per cent of the contracts. Under its contracts, Motorola will provide China Unicom exclusively with 2 million CDMA handsets. "There's no time limit on the arrangement," said Zhou Xiaoyang, a senior manager of Motorola (China) in Hangzhou, capital of East China's Zhejiang Province. Motorola's factory in Hangzhou currently has four production lines for CDMA stations and six for handsets. The company plans to produce 5 million CDMA handsets this year, of which 2 million are to be exported to the United States. Although China's CDMA market currently accounts for only 8 per cent of the world market, Zhou believes China will create a 500 billion yuan (US$60.41 billion) market in five years. Motorola set up the first CDMA production centre in China in 1996, the company's first outside the United States. Domestic firms approved to manufacture CDMA handsets are: 1. Ningbo Bird 2. China Kejian Co 3. Zhongxing Telecom 4. Beijing Posts & Telecommunications Equipment Factory 5. TCL Group 6. Qingdao Haier Group 7. Eastern Communications 8. Shenzhen Konka Group 9. Guangzhou Southern High-Tech 10. Zhongdian Telecommunications Technology 11. Datang Telecom 12. China Zhenhua Science & Technology 13. Shandong Langchao Group 14. Qingdao Haixin Group 15. Dalian Daxian Group 16. Nanjing Postel Telecommunications Co 17. Nanjing Putian 18. Xiamen Huaqiao Electronics www1.chinadaily.com.cn