China Unicom, China's second largest mobile phone operator,
denied Tuesday that the split of its marketing network foreshadows
a company break-up.
Company vice president Yang Xiaowei said the split of its
marketing team -- with one team covering the GSM and the other CDMA
networks, is a normal strategic adjustment, and denied that the
company is the epicenter of a major restructuring of the
telecommunications sector.
One China Unicom marketing team will run its CDMA Division and
another team will independently operate its GSM network, in a move
designed to boost efficiency, according to a company
videoconference.
But some analysts have speculated that it might be a sign of big
changes in the industry.
Li Guangyong, an analyst with Guangfa Securities, said it was
public knowledge the government was keen to reorganize the telecoms
market and that a carve-up of China Unicom would optimize the
allocation of mobile phone resources and enhance efficiency.
Despite its 141 million subscribers, China Unicom appears to be
the weak link in the present setup.
The company has for a long time languished behind its rival
China Mobile, which signed up a record 53 million new subscribers
in 2006 alone, analysts said.
Some analysts have pictured a new industrial scenario in which
China Mobile continues to be the country's largest mobile operator,
and China Telecom and China Netcom each acquire one of China
Unicom's 2G networks, allowing them to give market leader China
Mobile a run for its money.
A recent report from leading investment bank JP Morgan Chase
also discussed the possibility of a reorganization.
The surge in the price of China Unicom shares on the Shanghai
exchange prior to Wednesday has fueled speculation about a company
break-up.
Analysts said that the reorganization was logical as the
government would probably only issue three 3G technology
licenses.
China Unicom signed up 930,000 new subscribers to its GSM
network last year, bringing the total to 105 million. Subscribers
to its high quality, low-radiation CDMA network number 36
million.
(Xinhua News Agency February 1, 2007)
