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China Unicom Begins Fiber Optic Tender

Securities times, 1/26/10

China Unicom's (NYSE: CHU; 0762.HK; 600050.SH) 2010 tender for optical fiber and cable procurement has begun, results of which are expected to be announced around Chinese New Year in mid-February.

In 2009, telecom equipment manufacturers were unable to keep up with the demand for optical fiber and cables generated by the release of 3G licenses, causing market prices for cable to jump as high as RMB 100 per core kilometer, bringing in high profits for cable manufacturers. In 2009, optical fiber manufacturer Hengtong Optic-Electric (600487.SH) saw an estimated profit increase of 50-70% year-on-year, while Jiangsu Zhongtian Technology (600522.SH) expects year-on-year profit growth of 110-130%. At present, as supply has caught up with demand, current market prices for optical fiber have dropped to RMB 85-90 per core kilometer.

Keywords: Hengtong 600487.SH 600522.SH China Unicom procurement profit telecom 3G Zhongtian Technology 0762.HK 600050.SH CHU fiber optics

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