Chinese operators plan massive spending as industry restructures

China Unicom Ltd, the nation's second biggest mobile phone carrier, says it will spend up to 100 billion yuan (£7.8bn) over the next two years on its infrastructure.

Planned investment for this year is 18.7 billion yuan (£1.46bn).

The money will be used to add networks in rural areas and to introduce 3G services, to compete with China Mobile, the nation's largest carrier. It will also help China Unicom position itself in a market that is changing rapidly since the government decided to allow carriers to offer both fixed-line and mobile services.

China Unicom had 127.6 million customers on its GSM network at the end of June, and 43.2 million customers on its CDMA network. China Mobile had 414.6 million customers at the end of June, more than twice the total of Unicom's two networks combined.

Under a government reorganisation of the industry, China Unicom will sell its CDMA network to China Telecom, the nation's biggest fixed-line carrier, which will invest at least 80 billion yuan (£6.2bn) in the wireless network over the next three years.

The government plan also sees China Unicom buying fixed-line carrier China Netcom Group Corp, and China Mobile's parent buying China Tietong Telecommunications Corp, another a fixed-line carrier.

Once the shake-up is complete the government will issue three 3G licences, one of which is expected to go to China Unicom.

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