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China Unicom in deal with Motorola to expand network

The China United Telecommunications unit says it will pay the U.S. wireless company $190 million to expand its cellular networks in three provinces.

China Unicom, a wing of the nation's second-largest telephone company, China United Telecommunications, said today it will pay Motorola $190 million to expand its cellular networks in three provinces.

The expansion contracts will allow China Unicom to add some 2.3 million customers to its subscriber base, which stood at 4.2 million at the end of 1999. China represents one-sixth of the world's population and has the world's largest wireless communications network.

The companies are also in negotiations to set up seven new GSM network (Global System for Mobile Communications) stations in other regions, which could increase the subscriber base by as much as 5 million.

"There is pent up demand in China for cellular service," Motorola spokesman Joe Arimond said. "China Unicom is one of the big providers there, and we're giving them the equipment they need to address this growing demand for cellular."

China Unicom operates Motorola GSM networks in Shandong, Jiangsu and Hunan, three major provinces in China with a combined population of some 200 million.

China Unicom launched an initial public offering June 21, raising $4.9 billion in the nation's largest IPO outside of Asia. Shares have risen 27 percent since the IPO.