Three Chinese state ministries have created a competitor for China’s monopolistic Ministry of Posts and Telecommunications to expand the nation’s telecommunications system.
China United Telecommunications Corp., Unicom, initially intends to offer Global System for Mobile communications service in Beijing, Tianjin, Guangzhou and Shanghai. Unicom said it plans to build a network to serve 100,000 customers.
Many foreign governments and companies are seeking to work with Unicom, said Zhao Weichen, Unicom chairman of the board. “By the year of 2000, our first step of the program is to provide 10 percent coverage of the nation’s long-distance calls, to occupy 30 percent service of mobile telecom and realize the international interface with China Unicom networks.”
Five projects have been assigned to that end-technical transformation of special networks, interface construction, a mobile telecom project, satellite telecom project and an increase-in-value project.
“Our intention is a mutual development with local governments, domestic enterprises of the telecom sector and with those existing military and broadcasting networks,” Zhao said.
China Unicom was jointly created by the Ministries of Electronics Industry, Electric Power Industry and Railways. Chinese investors have pooled about $84 million for the company.
Motorola Inc.’s Cellular Infrastructure Division won a GSM cellular contract for the city of Guangzhou to support 20,000 subscribers. The first phase of the network was scheduled to be commercially deployed in the first half of this year.
Unicom’s Daqing branch has contracted with Northern Telecom (Asia) Ltd. to purchase a 900 MHz digital GSM cellular network. It will include 26 radio base stations and Nortel’s SuperNode switching system and can support 15,000 subscribers; Unicom plans to expand the network to more than 50,000 subscribers in the future, Nortel said. Daqing’s current network is based on analog technology.
GTE Corp. and Unicom have entered into a long-term strategic alliance for research and development for China’s second network. The venture will be headquartered in Beijing.
“My strong expectation,” said Lee K. Toole, president GTE-China, “is that this joint venture will contribute to the modernization and development of China’s telecommunications systems, bring down information barriers for China’s population and business community and stimulate growth and the opening of the market economy.”
Capital has come from more than a dozen groups, including Guangzhou South-China Telecommunications Investment Co. Ltd., Dalian Vastone Telecommunications and Cables Co. Ltd., China (Fujian) Foreign Trade Center Group, China International Trust and Investment Corp., China Resources Group, China National Chemicals Import and Export Corp. and China National Technology Import and Export Corp.
Unicom also intends to upgrade the networks of the ministries of Railways and Electric Power, and provide public telephone service in areas not covered by current networks or areas where there is a capacity shortage.
The birth of this corporation marks a new stage of socialist market economics, said Wang Zhongyu, director of China’s economic and trade commission.
China, with a population of 2 billion, is similar in land-mass size to the United States, but China has nearly 322 people per square mile, compared with 69 people per square mile in the United States.
