BEIJING—China Unicom’s CDMA network registered 448,000 subscribers at the end of February. Only a paltry 9,000 users signed up in February. The vast majority of CDMA users were transferred from an existing network that Unicom took over from Great Wall Telecom, and brand new sign-ups remain scarce.
On the other hand, 2.18 million users signed up for the operator’s GSM network, bringing the total to 29.21 million.
It becomes increasingly unlikely that Unicom will reach it target of 7 million subscribers on the CDMA network by year-end. The company is actively promoting handset sales by offering attractive subscription packages and is expected to further decrease call rates. Unicom is planning to buy half a million handsets from a few of the 19 licensed manufacturers able to deliver to stem the embarrassing shortage of CDMA handsets.
Many licensed manufacturers have not even started producing CDMA handsets because they consider the market to be too small to be profitable. However, also this week Haier Telecom received orders for more than 1 million CDMA handsets, spurring the company to crank up production. The company has an annual production capacity of 5 million sets, but has produced only a few hundred so far.
Without an increase in consumer confidence in CDMA network services, manufacturers will likely maintain a wait-and-see attitude. Even big spenders are loath to drop their GSM handsets and fork out the cash to buy a CDMA handset without a clear advantage.
Qualcomm is working on a dual-mode chip that would make it easy to switch from the GSM to the CDMA service, but no such handsets are currently available.
Meanwhile, Unicom is betting the launch of its CDMA 1x data network in the fourth quarter will entice GSM users to make the switch. In fact, China Unicom is expected to launch a global positioning system (GPS) service on the CDMA 1x network, allowing for location-based advertising.
