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Unicom May Lower Price of CDMA Assets

Oriental Morning Post, 6/12/08

A source at China Unicom (NYSE: CHU; 0762.HK; 600050.SH) headquarters has revealed that the group will finish its survey of provincial-level CDMA networks by June 25th, and finish its overall investigation by July 15th. China Unicom and China Telecom (NYSE: CHA; 0728.HK) will reach a final agreement on their restructuring prior to July 25th. The companies will then conclude price negotiations within 60 days and proceed with the second payment.

A national teleconference convened by China Unicom yesterday revealed that the sale price for China Unicom's CDMA network will be set according to its value in the mid-2008 CDMA Network Report. If the network's income ends up lower than 98% of its forecast value, the original sales price (RMB 43.8 bln) will be reduced by one percent for each percent that it falls short of that figure. Dong Mihua, Secretary of the Board for China Unicom, has stated that the most important thing is to prevent users of the CDMA network from switching network providers."

29.3 percent of China Unicom's employees will be transferred to China Telecom. This figure is proportionate to the company's income derived from its CDMA network. The four groups to be transferred include the general administration office, business services, assets and finances, and human resources groups.

Keywords: 0728.HK 0762.HK 600050.SH CDMA CHA China Telecom China Unicom CHU restructuring telecom wireless

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