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To boost profits this year, China Unicom Ltd will sell its paging service, buy another 10 provincial mobile communication services and stop offering new users free mobile phones for signing up to use the company's CDMA service.
Top executives said in Shanghai yesterday that Unicom's parent firm, Unicom Group, will sell 10 billion yuan (US$1.2 billion) in convertible bonds in China to finance the construction of its CDMA network.
On Wednesday, China Unicom reported net profits of 1.95 billion yuan for last year, up 16.6 percent from a year ago. But its CDMA ser-vice, launched at the beginning of last year and expected to become a future cash cow, lost 1.03 billion yuan.
"If we can add 13 million new CDMA subscribers in China within this year, our CDMA service will turn from being in red to black," said Tong Jilu, vice president of Unicom. "Our CDMA wireless data service will be the major selling point."
To cut the promotional costs of the CDMA service, Unicom said it will stop giving free handsets to subscribers. Last year, it gave cell phones to new users who agreed to sign a two- or three-year contract.
Yang Xianzu, the chairman of Unicom, said Unicom Group will use the 10 billion yuan raised through bond sales to build the CDMA network.
CDMA service accounted for 8.4 percent of Unicom's revenue last year, or 3.33 billion yuan. Mobile service based on GSM contributed 71.3 percent of the revenue.
Unicom plans to buy the remaining 10 provinces' mobile services from its parent company this year.
(eastday.com April 4, 2003)
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