Authorities consider Unicom break-up

1 Feb 2005

The management of China’s second largest mobile carrier, China Unicom, is reported to be in talks with the government with a view to breaking up the company and merging its operations with the nation’s other carriers. Unicom has been suffering financially due to the fact that it operates both a GSM and a CDMA network. According to numerous local newspaper reports, Unicom officials are mulling one option that would see the GSM network merged with that of its bigger rival, China Mobile, whilst the CDMA network would be handed over to China Netcom, the country’s second largest fixed line carrier. The authorities are keen to restructure the mobile market ahead of this year’s 3G licence allocation. Back in mid-2002 the government indicated that fixed line players China Telecom and China Netcom would be awarded cellular licences in a bid to bring further competition to the mobile market. However, this has yet to take place, and many industry insiders now believe that the state will instead award them 3G licences later this year.