HONG KONG: China Unicom Ltd has pledged not to start a price war in the nation's fledgling third-generation (3G) mobile phone market, easing worries that falling rates for telecom services could spark aggressive price-cutting among rivals.

Chang Xiaobing, chairman and chief executive officer of China Unicom, yesterday gave the pledge during a meeting with Hong Kong media as he spoke about the group's newly-launched 3G service and its prospects amid intensifying competition on the mainland's telecom market.

China Unicom launched its 3G service on May 17, while rival China Telecom is due to launch its 3G offering next month.

The wireless market's dominant player, China Mobile, launched its 3G service in April last year.

"The 3G market is like a freshly-baked cake. I hope it will provide new room for growth for the whole industry. (We) will not initiate a price war in this sector," Chang said.

He said China Unicom expects a downward trend in the average revenue per user (ARPU) for its voice and broadband services.

He urged China Unicom's rivals to refrain from adopting practices that will result in the flare-up of fiercer competition in the telecom market, especially with the advent of 3G.

Meanwhile, China Telecom Corp Chairman and Chief Executive Officer Wang Xiaochu echoed Chang's view on ARPU trend as he spoke about the group's 3G offering.

"The ARPU for voice services looks likely to trend lower, but the ARPU for China Telecom's newly-acquired CDMA business remains stable," Wang told the Hong Kong media following a shareholders' meeting.

Unicom's Chang said the company is hopeful that 3G will make a significant contribution to revenue starting the second half of this year.

He said Unicom's 3G operation is running smoothly in every aspect since its launch.

Chang said Unicom does not intend to support PCCW controlling shareholder Richard Li's appeal of a Hong Kong appeals court decision that blocked a $2.2 billion privatization plan for Hong Kong's dominant phone operator, PCCW Ltd.

Unicom took over China Netcom, which has a nearly 20 percent stake in PCCW.

The privatization offer was tabled by Li's Pacific Century Regional Developments Ltd and the Netcom unit of China Unicom, both of which are major PCCW shareholders.

Meanwhile, China Telecom's Wang said that he has no knowledge of any plans by mainland regulatory authorities to scrap the roaming fee charged by carriers on mobile users and the monthly rental fee charged on fixed-line users.

But he confirmed earlier reports that China will implement mobile phone number portability in Tianjin city and Hainan province in the second half of this year.

The scheme will allow mobile users to shift from one operator to another without the need to change their numbers.

In Tianjin, mobile users of any of the three operators will be allowed to take their phone numbers with them when they migrate to one of the other two; whereas in Hainan only China Mobile users will be allowed to keep their numbers when shifting subscription to the other two operators, Wang said.

Analysts believe that the new policy is intended to offset China Mobile's dominance in the wireless market.

(HK Edition 05/27/2009 page4)