Is China ready to carve up Unicom?

19 Jan 2005

Reports from China are suggesting that the government is considering splitting up the cellular operator China Unicom and dividing its assets between the two main fixed line companies, China Telecom and China Netcom. According to China Daily, a plan to carve up Unicom has already been submitted to the National Development and Reform Commission (NDRC), China’s main economic policy maker. Under the proposals, Unicom’s GSM network will be transferred to one wireline operator, while its CDMA systems will be handed to the other. This would create a mobile market with three players instead of the current two, with Telecom and Netcom competing alongside the current cellular market leader, China Mobile.

China Daily says that the NDRC has already dismissed an earlier plan to merge China Mobile with Netcom and Unicom with Telecom to create two full service providers. The changes in the Chinese telecoms market, where all four main players are state-owned, are coming as the government prepares to issue 3G licences. Authorities had been expected to hand concessions to Mobile, Unicom, Telecom and Netcom, but are now thought to prefer having just three next-generation operators to cut back on the cost of network rollouts.

China, China Unicom