China Unicom saw negative growth in pre-paid and post-paid CDMA cell phone subscribers in this July, reducing 413,000 from the previous month. The reduction is within expectation as China Unicom is delivering its CDMA networks to China Telecom.

By the end of July, the number of CDMA cell phone users of China Unicom declined to 42.756 million, in contrast to 43.169 million in June. The number of its GSM cell phone users increased 952,000 to 128.55 million during the period.

China Telecom saw a decrease of 600,000 fixed line telephone users in July, widening 3.4% from the previous month. China Netcom lost 302,000 fixed line users during the period. Experts say that the reduction of fixed line telephones is largely due to the fast penetration of cell phones.

As China Unicom is delivering its CDMA service to China Telecom, the three full-service telecom operators China Mobile, China Unicom, and China Telecom will be confronted with new challenges.

In a sharp contrast to the ailing performance of China Unicom, China Mobile, the bellwether of the industry, unveiled a significant result for this July. It newly added 7.11 million users in this month, as appose to 7.55 million in the previous month.

China Unicom says that it will have 259 million subscribers after the merger with China Netcom, which will consist of 128 million GSM users, 109 million fixed line telephone users and 23.36 million broadband users.

What is more, the self-run sales outlets will top 18,000 after the merger, of which 5,000 will belong to China Unicom and 13,000 for China Netcom. The new company will have about 170,000 mobile base stations and 430,000 PHS base stations.

In terms of a statement made by China Unicom, investment in mobile telecom service is expected to increase 100% in 2008 from the original plan of China Unicom. And the new company will invest CNY 100 billion in 3G mobile telecom service in the coming two years.

China Unicom will transfer more than 30,000 CDMA base stations and sell additional 10,000 base stations to China Telecom for CNY 4.5 billion.

After the deal is approved by shareholder conference, China Unicom will kick off large scale GSM network expansion.

Under the agreement, county-level sales outlets of China Unicom around the country will all be transferred to China Telecom. Half of CDMA sales outlets in ten Northern provinces will be taken over by China Telecom.

Source:SinoCast