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To: Caxton Rhodes who wrote (125611)	11/21/2002 9:04:24 AM
From: straight life	Respond to of 152472

UPDATE - China Unicom to buy networks, quadruple CDMA users Thursday November 21, 8:42 am ET By Rico Ngai and Daisy Ku (Combines stories, updates with analyst comments, share price) HONG KONG, Nov 21 (Reuters) - China Unicom (HKSE:0762.HK - News), the number two mainland cellular carrier, said on Thursday it will buy nine provincial networks from its state-owned parent and aims to quadruple the firms' closely watched CDMA user base to 21 million by the end of next year. Confirming reports by Reuters last week, Unicom said on Thursday it will pay 4.8 billion yuan ($580 million) in cash and assume 17.7 billion yuan in debt to buy the assets. The networks, mostly in less-affluent central and northeastern China, would have boosted the listed unit's mobile user base by 14.5 million to 52.92 million -- both GSM and CDMA customers -- based on end-September figures, Unicom said in a statement. The CDMA service, which now stands at five million subscribers, will add some 12 million users to networks owned by the Hong Kong-listed firm and four million to networks retained by its parent, China Unicom Group president Wang Jianzhou said. Growth of that magnitude would be a welcome sign for U.S. technology firm Qualcomm Inc (NasdaqNM:QCOM - News), which has struggled for years to get its code division multiple access (CDMA) standard adopted in China, which has become the world's largest cellular market largely on the rival GSM standard alone. An upbeat Wang said Unicom, the smaller rival of dominant carrier China Mobile Hong Kong Ltd (HKSE:0941.HK - News), was "still confident" of reaching a CDMA user target seven million users by the end of 2002. Unicom said it still plans to sell its loss-making paging operation back to its parent and it has no time table for the disposal. "We expect the paging business will be profitable next year," executive vice president Shi Cuiming said. "After we have finalised the network purchase, then we will think about selling it." CDMA SEEN PROFITABLE Unicom said the new networks recorded an operating profit of 763 million yuan for the six months ended June 30, including an operating loss of 242 million yuan from their CDMA business. By comparison, the listed firm's original 12 networks posted a 2.25 billion yuan profit for the same period, including a 603 million yuan operating loss on its CDMA service. Shi, however, said the firm foresees the new networks' CDMA business to turn a profit next year as the year-old service is expected to mature with the increasing availability, and declining prices, of CDMA handsets. "As the CDMA business becomes more developed, we expect it will be able to reverse losses next year," Shi said. Unicom said the new networks would have enhanced its earnings per share by 4.5 percent to 0.187 yuan per share year-on-year for the six months to end-June, assuming the purchase was made in the beginning of this year. Investment bankers JP Morgan and UBS Warburg have said they expect the purchase would boost Unicom's earnings per share by 22 percent and 19 percent, respectively. In a bid to boost its CDMA subscriber base by trawling in low- to mid-end users, Unicom said it will start this year the test trial of prepaid service, which usually generates lower average revenue per user (APRU) than post-paid service. "We will start with only a few cities and upscale the new service gradually next year," said Wang. He said the firm has not set any target on the number of prepaid CDMA users for next year. Unicom also revealed it has launched commercial trial of a new service, offering corporate clients a speed-dialling function to the companies' own phones with a special rate. SHARES SLIP Following the network purchase announcement, Unicom shares slipped 2.61 percent to close at HK$5.60 on Thursday after gaining 2.6 percent to HK$5.90 in the pre-open session. Analysts said the deal is fairly priced but they do not expect the stock to have much upside as it had gained more than 15 percent in the last month due to expectations of the deal. "I think there is likely to be selling pressure in the short term because the deal, although reasonably priced, really has offered no surprises," said OCBC Securities analyst Ricky Lee. The deal carries a price-to-earnings (PE) ratio of about 10.4 times 2002 forecast net profit of 460 million yuan and 7.4 times 2003 forecast net profit of 650 million yuan, Unicom said, compared with a PE of about 17 times for Unicom's own shares. Unicom expects the number of users of the newly purchased networks to reach 16.41 million by the end of the year. Earlier this year, rival China Mobile (Hong Kong) (HKSE:0941.HK - News), the world's biggest cellular carrier by users, bought eight provincial networks from its parent, China Mobile Communications, for US$10.2 billion. Analysts said the task for Unicom now is to consolidate its new networks rather than acquire any more of its parent's remaining nine networks in poorer areas. Bear Stearns analyst Evan Erlanson added: "It would be difficult for them to do two deals in rapid succession. So I expect them to probably sit on the acquisition for another 12 months before making further acquisitions." Unicom said it had earmarked 6.8 billion yuan in capital expenditure from 2002 to 2004 mainly for GSM construction in the newly-acquired networks. It also said it expected to spend 884 million yuan to lease CDMA spectrum in the nine provinces and regions from its parent. (Additional reporting by Katie Hunt) biz.yahoo.com

To: Caxton Rhodes who wrote (125611)	11/22/2002 8:12:57 AM
From: Wyätt Gwyön	Read Replies (5) \| Respond to of 152472

I'll take the integrity of Irwin Jacobs and Tony Thornley over any exectives in any company anywhere, period. we all have our preferences. mine is for Warren Buffett, who has i believe more than 99% of his net worth in BRK.A; doesn't use options at his company because he rightly recognizes them as an expense; will go to his grave without unloading oodles of stock on the market soon after an earnings call where he raises expectations; didn't make his son an important executive and "heir apparent" at Berkshire. IMHO.