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Rumor: China Unicom Local Branches Offer Own Subsidies

China Business News, 12/01/11

China Unicom's (NYSE: CHU; 0762.HK; 600050.SH) local branches reportedly launched their own terminal subsidy policies for brand WCDMA handsets. The subsidies allow local operators to expand their selection beyond handsets from a small group of brands such as ZTE (0763.HK; 000063.SZ), Huawei, and China Wireless Technologies (2369.HK) subsidiary Yulong (Coolpad) provided by Unicom's terminal procurement subsidiary Unicom Huasheng Telecommunications Technology, according to sources at local branches and handset vendors.

According to a local branch middle manager, China Unicom has quietly allowed the subsidies which help to rapidly expand its 3G user base. Subsidies vary across regions for non-operator-customized WCDMA handsets, with some subsidy levels approaching those offered by Huasheng.

According to one promotional flyer obtained by China Business News, one local Unicom branch offers a free TCL A919 handset with RMB 1,300 in calling credit for an advance deposit of RMB 1,300, approximately equivalent to the subsidy from Huasheng for the Lenovo (0992.HK) A60 and ZTE V880.

Keywords: TCL A919 tariffs China Unicom subsidy handset wireless Huasheng 3G WCDMA 0762.HK 600050.SH CHU handset model

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