BEIJING-The listed vehicle of China United Telecommunications (China Unicom) is making plans to lease a Code Division Multiple Access network its parent has recently acquired.
Terms of the original plan called for the company to acquire the network once it became profitable, but this would have led to competition between the parent CDMA network and the listed company’s GSM network.
If the new plan goes ahead, listed China Unicom would pay a leasing fee to its parent for operating rights to the network. However, capital expenditures of between $1.8 billion and $2.2 billion to expand the network’s capacity to accommodate 10 million users during the next two years would still be born by its parent.
Hong Kong’s South China Morning Post quotes analysts’ estimates of $169 million and $202 million leasing fees to obtain the rights to operate the network.
