To: foundation who wrote (23871 ) 6/18/2002 7:57:59 AM From: quartersawyer Read Replies (1) | Respond to of 197032 Unicom Management Shuffle, Scapegoat for CDMA? June 17, 2002 06:20 PM Unicom has announced a major change in senior management for its much touted "Xin Shi Kong," a wholly owned subsidiary in charge of CDMA network construction and operations. Wang Yingpei, current chairman and president of Xin Shi Kong, will be replaced by Zhang Fan, previously Unicom's deputy chief engineer. In China, the term "engineer" is often understood as a title not a profession, for example, a chief engineer in China has the same status as vice president of a company, the person usually does not do any engineering work but a decision maker. Unicom denies the change is related to disappointing performance of CDMA, it is "completely a company's internal consolidation between Xin Shi Kong and mobile services, and a normal personnel change," said the company in a statement, but analysts believe pressure from Hong Kong investors on CDMA's mediocre performance is one of the main reasons for the decision (Related Report). Xin Shi Kong was formed in early 2001 when Unicom was about to launch CDMA cellphone service. Before joining the company, Wang Yingpei was president of Unicom's Yunnan branch in southwest China. There are reports that Wang's record in the far-flung province earned him credibility with Unicom's top leaders that moved him back to Beijing to become head of Xin Shi Kong. During the last year, Wang rallied the troops for CDMA development at Unicom. He raised the objective of CDMA to cover 300 cities in three years with a total switching capacity to 50 million lines, and total investment of 70 billion yuan ($8.4 billion) in three years. During his "go-go" years, Wang repeatedly said his goal is to build "the largest and best CDMA network in the world." We now know he does not have to remember or be responsible for his words any more. His replacement, Zhang Fan is currently president of Unicom's mobile services division. People who know about Zhang say he is a "down-to-earth" type of guy. There is not much report on Zhang's past record, but analysts say his appointment is not necessarily that he will be any better than Wang, but Unicom has to make the facelift to appease investors. Analysts question Unicom's decision to form Xin Shi Kong and give it the decision making power on CDMA network construction. Then after the first phase of network was completed, Xin Shi Kong leased it to Unicom (HK) for about 1.5 billion yuan ($177 million) in 2002. This way, Xin Shi Kong has in effect lost its operations of CDMA network, and become more of an administration office. Recently, Unicom announced it will launch CDMA2000 1X service by the end of year (Related Report). Analysts say launching new service too soon could put pressure on current CDMA (IS-95A) service which Unicom projects to recruit 7 million customers this year, but others believe it can only reach 3-4 million at best. [0617MGT chinanex.com