China Unicom to invest USD14.6b on network expansion

13 Aug 2008

China Unicom has said it may spend as much as RMB100 billion (USD14.6 billion) to expand its wireless network, in a bid to narrow the gap with rival China Mobile. The proposed investment covers spending in 2009/10, according to a Unicom statement to the Hong Kong stock exchange; the Beijing-based company said previously 2008 capital expenditure would be RMB18.7 billion. The increase in CAPEX will allow Unicom to roll out networks in rural areas and introduce 3G services.

Under the Chinese government’s reorganisation of the telecoms industry, China Unicom will sell its CDMA-based business to China Telecom but will retain its GSM operation. At the end of June 2008 Unicom’s GSM arm had 127.6 million customers, compared to 43.2 million CDMA users. China Telecom has already announced that it will invest at least RMB80 billion in the CDMA network over a three year period, which will include spending on TD-SCDMA, China’s homegrown 3G standard. Three 3G licenses will be issued when the industry revamp is completed in May 2009. As part of the government’s reorganization proposal, Unicom will buy fixed-line carrier China Netcom and China Mobile’s parent will buy China Tietong.

China, China Unicom