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Revenues for China Unicom's fledgling CDMA mobile network will surpass costs in the second half, moving the company towards a goal of break-even status for the system by year end, a top executive said yesterday.

China Unicom Ltd chairman and president Wang Jianzhou answers a question during a news conference in Shanghai September 1,2003. China Unicom Ltd, China's number two mobile carrier, would like to take a minority stake in a CDMA venture outside China in the next one to two years, Wang said. Unicom, whose CDMA mobile phone system uses Qualcomm technology, is considering strategic investments with US-based Qualcomm Corp in developing markets near China, he added. [Reuters]

Unicom, the smaller of China's two cellular carriers, should have posted higher average revenue per user (ARPU) than per-user costs for its CDMA system in July or August, said Tong Jilu, deputy chief executive of unlisted parent China United Telecommunications Corp.

Investors have worried that Unicom has been pushing growth of its CDMA network, launched early last year alongside its existing GSM network, at the expense of profits. The network reaped ARPUs of 148.7 yuan (US$17.96) in the first half of 2003, Tong said.

"Our average costs were 174 yuan (US$21) in the first half, but we expect that to come down to 124 yuan (US$15) in the second half," he said.

Hong Kong-listed China Unicom, which last week posted an 11.6 per cent rise in interim profit, has said it would make its CDMA network break even by year end.

"I expect our costs to come down to 80 yuan (US$9.7) next year, and our ultimate target is 70 to 75 yuan (US$8.5-US$9.1)," Tong said.

The company said last week its CDMA business incurred a whopping pretax loss of 590 million yuan (US$71 million).

Unicom's CDMA subscribers rising 16.6 per cent to 9.98 million in the first half while its GSM subscribers jumped 48.6 per cent to a total of 59.66 million.

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