China Unicom Ltd. yesterday started operations of a CDMA 1x mobile network in Macao, as part of its expansion drive outside the Chinese mainland.

Unicom, the second largest cellular operator on the mainland, will offer roaming services, based on the CDMA 1x standard, to tourists visiting Macao from the mainland and other parts of the world.

Additionally, "In a years time, Unicom will apply (to local regulators) to offer mobile telecom services such as voice, data and multimedia, to local residents in Macao," said company chairman Chang Xiaobing.

Unicom won a service license bidding from the Macao government in March to operate a CDMA mobile network in the Macao Special Administrative Region, defeating four other bidders, including SmarTone Telecommunications Holdings and Macao's leading operator, Companhia de Telecomunicacoes de Macao.

Having obtained the license, China Unicom became the first mainland telecom operator to offer mobile services outside the mainland.

Unicom vice president Lu Jianguo said the roaming service could prove very lucrative for the company.

Macao has a population of more than 440,000, served by three GSM operators.

Previously there was no CDMA service provider, thus CDMA users from outside Macao were unable to operate their mobile phones there.

CDMA is popular in South Korea, Japan, North America as well as the Chinese mainland.

The Macao government is hoping the CDMA roaming service could boost the region's tourist, exhibition and gambling sectors and meet demands for CDMA services during big events such as sports games and entertainment activities.

"We will be able to offer CDMA roaming services at the 4th Macao East Asian Games which will be held later this month," said Lu.

"The demands for mobile communications in Macao have been growing since it was returned to the motherland six years ago."

China Unicom is the second largest CDMA network operator in the world in terms of subscription base, trailing US operator Verizon.

"I expect Unicom will overtake Verizon (as the world's largest CDMA operator) next year," Lu said.

Unicom has more than 120 million mobile subscribers, including 31.66 million CDMA users.

China now has more than 370 million mobile phone subscribers, boasting the world's largest mobile subscriber base.

Lu would not specify the total investment it has made in the CDMA networks in Macao.

The company previously said it planned to spend 250 million yuan (US$31.25 million).

Marching into the mobile market in Macao marks an important step for Unicom's overseas expansion strategy, said Lu.

"We hope to accumulate experience of operating networks outside the mainland to drive our overseas expansion," he said.

Lu would not predict when Unicom will start making profits from the networks built in Macao.

Although the domestic market still offers big opportunities, mainland operators are now looking for business opportunities overseas, a move that is encouraged by the government.

Unicom's arch-rival China Mobile has been reportedly talking with several overseas operators for acquisition opportunities.

China Mobile (Hong Kong) Ltd, China Mobile's listing arm in Hong Kong, has signed a memorandum of understanding to acquire the China Resources Peoples Telephone Co Ltd, the fourth-largest mobile telecom operator in Hong Kong.

Peoples Telephone had 1.21 million mobile users by June.

The acquisition, if successful, will help China Mobile expand roaming revenues generated by its users touring Hong Kong. China Mobile had recorded 231 million subscribers in August.

(China Daily October 19, 2005)