China Unicom Explained

China United Network
Communications Group
Native Name:Chinese: 中国联合网络通信集团有限公司
Type:State-owned enterprise
Industry:Telecommunications
Area Served:Mainland China, Hong Kong
Subsid:PCCW (18.46%)
Location:Beijing, China
Shanghai, China
Footnotes:data obtained from China United Network Communications Ltd. (the accounts of the parent company was not disclosed); in consolidated financial statement; excluding minority interests to red chip minority shareholders[1]
Module:
Child:yes
Asn:4837
Trafficlevels:10-20 Tbps[2]

China United Network Communications Group (China Unicom) is a Chinese state-owned telecommunications operator. Started as a wireless paging and GSM mobile operator, it currently provides a range of services including mobile network, long-distance, local calling, data communication, Internet services, and IP telephony. China Unicom is the third-largest wireless carrier in China and the sixth largest mobile provider in the world as of 2022.[3]

History

China Unicom (then known as) was founded as a state-owned enterprise in 1994[4] by the Ministry of Railways, the Ministry of Electronics and the Ministry of Electric Power Industry; the establishment was approved by the State Council in December 1993.[5]

China Unicom was among six state-owned companies that built the communications infrastructure and assisted in financing the Ministry of Industry and Information Technology's Connecting Every Village Project, which began in 2004.[6] The project aimed to promote universal telecommunications and internet access in rural China. The program successfully extended internet infrastructure throughout rural China and promoted development of the internet.

China Unicom has operated a CDMA network in Macau since October18, 2006[7] and internet services in North Korea since 2010.[8], the company had 125 million GSM subscribers and 43 million CDMA subscribers.[9] As of November 2008 the CDMA operations have been moved to China Telecommunications Corporation (China Telecom Group).[10] On 7 January 2009, China Unicom was awarded WCDMA license to expand its business to 3G telecommunication.[11] UMTS (Universal Mobile Telecommunications System) was launched in major cities across China on May 17, 2009.

On July 11, 2020, China Unicom joined hands with LuHan to launch the "FuLu Companion Card", which sounded the forward number for the further development of 5G. LuHan also officially unlocked his new identity and became a "China Unicom Innovation Partner", with the "FuLu companion card" to bring exclusive benefits and surprises to the majority of Unicom users.[12]

IPOs

In February 2000 a subsidiary "China Unicom Hong Kong" was incorporated in Hong Kong and was listed on the Hong Kong Stock Exchange on June 22, 2000.

The intermediate parent company "China Unicom (Hong Kong) Limited" was "China Unicom (BVI) Limited",, the BVI company owned 77.47% shares of China Unicom (H.K.). In turn, China Unicom (H.K.) owned the operating subsidiaries of the group. In 2002, another intermediate parent company "China United Network Communications Limited" was established in Shanghai (headquartered in Beijing), to own 51% stake of "China Unicom (BVI) Limited" as well as listing the shares in the Shanghai Stock Exchange.[13], state-owned China Unicom Group owned 74.6% shares of the A share company, in turn the A share company owned 73.84% of the BVI company.[14] The BVI company owned 77.47% shares of the red chip company.[15] To sum up, the Chinese Government via A share company, owned 42.67% stake of the operating subsidiaries, as well as additional 20.27% stake by the minority stake in the BVI company.

Merger with China Netcom

On June 2, 2008, China Unicom announced its intention to sell its CDMA business and assets to China Telecommunications Corporation (China Telecom Group) for a combined total of 110 billion RMB[10] and to merge the remainder of the company,[16] in a share swap valued at US$56.3 billion (based on Unicom's stock last traded price) on June 2, 2008, with China Netcom.[17] The CDMA business was officially moved to China Telecom in early November.

In July 2009, China Unicom signed a $700 million deal with infrastructure vendor Ericsson to upgrade the company's GSM network.

China Unicom has operated an internet service in North Korea since 2010.

In April 2012, China Unicom was a founding member in the formation of Cloud Computing Industry Alliance in Beijing. Other members of the alliance include Baidu, Tencent, and Alibaba.[18] [19]

Partnership with Telefonica

In 2009, China Unicom (Hong Kong) agreed to a US$1 billion cross-holding with Spain's Telefónica.[20] In January 2011, the two partners agreed a further US$500 million tie-up in each other, which following completion in late 2011, Telefónica will hold a 9.7% shares in China Unicom (H.K.), while the red chip company will own 1.4% shares of the Spanish firm.[21] The companies also agreed to deepen their cooperation in areas such as procurement, mobile service platforms, service to MNC's wholesale carriers, roaming, technology, among others, where both companies have been cooperating since the signature of their strategic alliance agreement.[22] [23]

In June 2012, China United Network Communications Group (China Unicom Group), the ultimate parent company of Hong Kong listed company "China Unicom (Hong Kong)", had agreed to buy back about 1.1 billion shares (approx. 4.6% of the share capital) of the red chip company from Telefónica for an approx. HK$11 billion. (HK$10.21 per share; by narrow band floating exchange rate approx. US$1.4 billion), via an unlisted subsidiary "China Unicom Group Corporation (BVI) Limited". Immediate after the deal, Telefónica still owned 5% of China Unicom (H.K.).[24] [25] In 2014 Telefónica sold a further 2.5% shares of "China Unicom (H.K.)" for HK$6.66 billion (HK$11.14 per share).[26]

During year 2016, Telefónica sold a further 1.51% shares of "China Unicom (H.K.)" for HK$2.822 billion (HK$7.8 per share),[27] Telefónica owned 1% shares of the red chip company (decreased from 2.51% year-to-yearly), as well as Telefónica's director César Alierta, still served as a director of "China Unicom (H.K.)".

Mixed-ownership reform of state-owned enterprise

In 2017 China Unicom became one of the pilot projects of the mixed-ownership reform of the Chinese state-owned enterprise, which saw a decrease in the Government's ownership.[28]

In 2017 the Class A listed company of the group introduced ten strategic investors: state-controlled, state-controlled listed company China Life Insurance, a private equity fund that was owned by China Cinda Asset Management and a company related to Tencent, a private equity fund partially owned by Baidu and Industrial Bank, a private equity fund that related to JD.com, a public company Ali Venture Capital, a public company Suning Commerce Group and three minor private equity funds that was subscribed by companies such as Kuang-Chi and CRRC Group.[29] [30]

In the same year, the fund raised by the A share company was injected to the Hong Kong incorporated red chip company, via "China Unicom (BVI) Limited", for HK$13.24 per share (for a maximum of 6.64 billion share / HK$88 billion).[31]

Establishment of China Unicom Global Limited

On 2 December 2016, China Unicom Global Limited launched the “CUniq” overseas mobile virtual network operator (“MVNO”) service in London, UK and unveiled the one-card-multiple-number service.[32]

U.S. sanctions

See also: United States sanctions against China and Military-civil fusion. In October 2019, a group of U.S. senators urged the Federal Retirement Thrift Investment Board to divest U.S. pension money from any investment in China Unicom for providing telecommunications services to disputed artificial islands in the South China Sea.[33] In August 2020, the United States Department of Defense published a list of companies operating directly or indirectly in the United States with ties to the People's Liberation Army. China Unicom was included on the list.[34] [35]

In October 2020, the Federal Communications Commission (FCC) requested the United States Department of Justice report whether China Unicom poses a "national security risk".[36]

In November 2020, the U.S. President issued an executive order prohibiting U.S. companies and individuals owning stocks that the United States Department of Defense deemed to have links to the People's Liberation Army - which included China Unicom.[37] [38] In consequence of the order, the New York Stock Exchange delisted China Unicom in January 2021.[39]

In March 2021, the FCC initiated proceedings to revoke China Unicom's authorization to operate in the U.S. due to "national security" concerns.[40] In January 2022, the FCC revoked China Unicom's authorization to operate in the United States, giving it 60 days to cease providing telecommunications services.[41] In September 2022, the FCC added China Unicom to a list of companies considered "national security threats".[42]

Equity investments

Reaction

Surveillance allegations

In December 2020, The Guardian reported that a security researcher identified evidence of surveillance campaign against Americans by China Unicom via Caribbean mobile networks, Liberty Latin America based in the United States and Bahamas Telecom based in The Bahamas. China Unicom strongly denied the allegations.[44]

See also

Notes and References

  1. Web site: 2016 Annual Report. 16 March 2017. 25 August 2017. China United Network Communications Limited. zh. 25 August 2017. https://web.archive.org/web/20170825190019/http://static.sse.com.cn/disclosure/listedinfo/announcement/c/2017-03-16/600050_2016_n.pdf. live.
  2. Web site: PeeringDB . China Unicom . PeeringDB . October 31, 2022 . February 8, 2023 . https://web.archive.org/web/20230208023131/https://www.peeringdb.com/asn/4837 . live .
  3. Book: Roach, Stephen S. . 2022 . . 978-0-300-26901-7 . New Haven . 10.12987/9780300269017 . j.ctv2z0vv2v . 1347023475 . Stephen S. Roach.
  4. Book: Roach, Stephen S. . 2022 . . 978-0-300-26901-7 . New Haven . 10.12987/9780300269017 . j.ctv2z0vv2v . 1347023475 . Stephen S. Roach.
  5. 关于同意组建中国联合通信有限公司的批复. 14 December 1993. 25 August 2017. State Council (China). zh. 25 August 2017. https://web.archive.org/web/20170825234901/http://www.gov.cn/xxgk/pub/govpublic/mrlm/201012/t20101217_63189.html. live.
  6. Book: Shi, Song . China and the Internet: Using New Media for Development and Social Change . 2023 . . 9781978834736 . New Brunswick, NJ.
  7. News: CHENG. Jingsheng. 19 October 2006. 中国联通CDMA澳门本地业务开通. zh. C114中国通信网. live. 24 October 2017. https://web.archive.org/web/20171025021955/http://www.c114.net/news/119/a124815.html. 25 October 2017.
  8. News: Taylor. Adam. October 2, 2017. North Korea appears to have a new Internet connection — thanks to the help of a state-owned Russian firm. Washington Post. live. 28 August 2020. https://web.archive.org/web/20200703095822/https://www.washingtonpost.com/news/worldviews/wp/2017/10/02/north-korea-appears-to-have-a-new-internet-connection-thanks-to-the-help-of-a-state-owned-russian-firm/. 3 July 2020.
  9. Web site: China Unicom Subscriber Data. dead. https://web.archive.org/web/20111004054422/http://www.chinaunicom.com.hk/en/investor/monthly.html?year=2008&month=4&ym=2008%204. 2011-10-04.
  10. News: 2 June 2008. ROUNDUP China Unicom acquires Netcom, sells CDMA assets as telco reorg takes off. Forbes. 10 June 2008. https://web.archive.org/web/20110604010459/http://www.forbes.com/feeds/afx/2008/06/02/afx5069042.html. 4 June 2011.
  11. News: 2009. China awards 3G licences. dead. https://web.archive.org/web/20090327053951/http://www.brandrepublic.asia/DigitalMedia/Mobilearticle/2009_01/China-awards-3G-licences/33922. 2009-03-27.
  12. Web site: 官宣！. live. https://web.archive.org/web/20200711121514/https://mp.weixin.qq.com/s/HUwDpWlnXxm0usRYMvYvKA. 2020-07-11. 2020-07-11.
  13. Web site: Prospectus. 17 September 2002. 26 August 2017. China United Network Communications. zh. 26 August 2017. https://web.archive.org/web/20170826113114/http://static.sse.com.cn/disclosure/listedinfo/announcement/c/2002-09-17/600050_20020917_1.pdf. live.
  14. Web site: 2002 Annual Report. 2 April 2003. 26 August 2017. China United Network Communications. zh. 26 August 2017. https://web.archive.org/web/20170826153118/http://static.sse.com.cn/disclosure/listedinfo/announcement/c/2003-04-02/600050_2002_n.pdf. live.
  15. Book: 2002 Annual Report. Report of the Directors. 14 April 2003. China Unicom (Hong Kong). 26 August 2017. 26 August 2017. https://web.archive.org/web/20170826121614/http://www.hkexnews.hk/listedco/listconews/SEHK/2003/0414/LTN20030414100.htm. live.
  16. Web site: China Netcom / China Unicom Press Release about Merger. 2008-06-02. 2015-09-23. https://web.archive.org/web/20150923202846/http://www.chinaunicom.com.hk/en/press/pressrelease/news.html?id=4581. dead.
  17. Web site: China telecom companies agree to $56 billion merger . 2008-06-10 . Houston Chronicle.
  18. Web site: China Unicom Hongkong. dead. https://archive.today/20130118225545/http://www.brightwire.com/company/13248-china-unicom-hong-kong-ltd. 2013-01-18.
  19. Web site: China Cloud Computing Industry Alliance Established . BrightWire . dead . https://archive.today/20120724063732/http://www.brightwire.com/news/202013-china-establishes-cloud-computing-industry-alliance-in-beijing . 2012-07-24 .
  20. Web site: 21 October 2009 . Completion of Discloseable Transaction - Increase in Shareholding Interest in the Company by Telefonica and Investment by the Company in Telefonica . live . https://web.archive.org/web/20170825225715/http://www.hkexnews.hk/listedco/listconews/SEHK/2009/1021/LTN20091021534.pdf . 25 August 2017 . 25 August 2017 . China Unicom (Hong Kong).
  21. Web site: 23 January 2011 . Telefonica and China Unicom strengthen ties . live . https://web.archive.org/web/20110124044037/http://www.bbc.co.uk/news/business-12261887 . 24 January 2011 . 23 January 2011 . BBC News.
  22. Web site: Telecommunications - China Unicom and Telefonica Strengthen Strategic Alliance . 26 January 2011 . telecommunications.tmcnet.com . 17 July 2011 . https://web.archive.org/web/20110717064226/http://telecommunications.tmcnet.com/topics/telecommunications/articles/137943-china-unicom-telefonica-strengthen-strategic-alliance.htm . live .
  23. Web site: Telefonica and China Unicom . dead . https://web.archive.org/web/20150908040027/http://saladeprensa.telefonica.com/jsp/base.jsp?contenido=%2Fjsp%2Fnotasdeprensa%2Fnotadetalle.jsp&id=0&origen=portada&idm=eng&pais=1&elem=16034&titulo=Telef%F3nica%20and%20China%20UNICOM%20s . 2015-09-08 . 2022-06-29 . Telefónica.
  24. Web site: June 11, 2012 . Spain's Telefonica sells Unicom stake for $1.4B . dead . https://web.archive.org/web/20120613172208/http://www.thejakartapost.com/news/2012/06/11/spains-telefonica-sells-unicom-stake-14b.html . June 13, 2012 . the jakarta post.
  25. Announcement . 10 June 2012 . 25 August 2017 . China Unicom (Hong Kong) . 31 July 2020 . https://web.archive.org/web/20200731155625/https://www1.hkexnews.hk/listedco/listconews/sehk/2012/0610/ltn20120610002.pdf . live.
  26. Web site: 2017 . 2016 Annual Report . live . https://web.archive.org/web/20170825184435/https://www.telefonica.com/documents/153952/13347920/Consolidated_Annual_Accounts_2016.pdf/dc4fed73-51c2-433a-95d0-ef16910abbe9 . 25 August 2017 . 25 August 2017 . Telefónica.
  27. News: Lau . Fiona . Sumeet Chatterjee . 9 July 2016 . Telefonica raises $364 million from China Unicom share sale: sources . Reuters . Hong Kong . live . 29 May 2019 . https://web.archive.org/web/20190529032759/https://www.reuters.com/article/us-china-unicom-hk-equity-telefonica-idUSKCN0ZP0CU . 29 May 2019.
  28. News: http://www.ftchinese.com/story/001073941. zh:联通混改“得”与“失”. "Pros" and "Cons" of the mixed-ownership reform of China Unicom. 28 August 2017. The Financial Times (Chinese edition). Chinese: 郑. Chinese: 志刚. 17 November 2017. zh. 17 November 2017. https://web.archive.org/web/20171117180448/http://www.ftchinese.com/story/001073941. live.
  29. Web site: 联通混改的本质. 22 August 2017. 25 August 2017. 邓. 元杰. Sina. zh. 25 August 2017. https://web.archive.org/web/20170825185613/http://cj.sina.com.cn/article/detail/1660297672/370860?column=china&ch=9. live.
  30. Web site: 非公开发行A股股票预案. 21 August 2017. 25 August 2017. China United Network Communications. zh. cninfo.com.cn. https://web.archive.org/web/20170927202152/http://www.cninfo.com.cn/cninfo-new/disclosure/sse/bulletin_detail/true/1203829681?announceTime=2017-08-21. 27 September 2017. dead.
  31. News: BRIEF-China Unicom Hong Kong enters share subscription agreement with controlling shareholder Unicom Bvi. 22 August 2017. 27 August 2017. Reuters. 27 August 2017. https://web.archive.org/web/20170827085153/https://www.reuters.com/article/brief-china-unicom-hong-kong-enters-shar-idUSFWN1L80PA. live.
  32. Web site: China Unicom launches UK MVNO on O2's network. Global Telecoms Business. 26 May 2017. 13 January 2017. https://web.archive.org/web/20170113024646/http://www.globaltelecomsbusiness.com/article/3644948/China-Unicom-launches-UK-MVNO-on-O2s-network.html#.WEdqH7J97IU. live.
  33. News: Delevingne . Lawrence . McCrank . John . 2019-10-22 . Senators urge U.S. retirement fund to reverse China investment decision . en . Reuters . live . 2020-08-29 . https://web.archive.org/web/20191105154151/https://www.reuters.com/article/usa-trade-china-msci-idUSL2N277123 . 2019-11-05.
  34. Web site: August 28, 2020 . DOD Releases List of Additional Companies, in Accordance with Section 1237 of FY19 NDAA . live . https://web.archive.org/web/20200830192407/https://www.defense.gov/Newsroom/Releases/Release/Article/2328894/dod-releases-list-of-additional-companies-in-accordance-with-section-1237-of-fy/ . 30 August 2020 . 30 August 2020 . U.S. Department of Defense.
  35. Web site: August 28, 2020 . Qualifying Entities Prepared in Response to Section 1237 of the National Defense Authorization Act for Fiscal Year 1999 (PUBLIC LAW 105–261) . live . https://web.archive.org/web/20200828202056/https://media.defense.gov/2020/Aug/28/2002486689/-1/-1/1/LINK_1_1237_TRANCHE-23_QUALIFYING_ENTITIES.PDF . 28 August 2020 . 30 August 2020 . U.S. Department of Defense.
  36. News: Shepardson . David . 2020-10-16 . FCC asks Justice Department to weigh in on China Unicom U.S. operations . en . . live . 2020-10-18 . https://web.archive.org/web/20201018083907/https://www.reuters.com/article/us-usa-china-telecom-idUSKBN2712VG . 2020-10-18.
  37. News: Chen . Shawna . November 12, 2020 . Trump bans Americans from investing in 31 companies with links to Chinese military . . live . November 12, 2020 . https://web.archive.org/web/20201113055204/https://www.axios.com/china-military-trump-investments-ban-a0458e29-2245-4bde-920b-d1c6bc698370.html . November 13, 2020.
  38. News: Pamuk . Humeyra . Alper . Alexandra . Ali . Idrees . 2020-11-12 . Trump bans U.S. investments in firms linked to Chinese military . en . . live . 2020-11-12 . https://web.archive.org/web/20201113055456/https://www.reuters.com/article/us-usa-china-securities-exclusive-idUSKBN27S2X3 . 2020-11-13.
  39. News: Mozur . Paul . 2021-01-01 . New York to Delist Chinese Telecom Firms in Symbolic Shift . en-US . . live . 2021-01-01 . https://web.archive.org/web/20210101075008/https://www.nytimes.com/2021/01/01/business/nyse-delist-china-mobile.html . 2021-01-01 . 0362-4331.
  40. News: Shepardson . David . 2021-03-17 . FCC moves against two Chinese telecoms firms operating in U.S. . en . Reuters . 2021-03-17 . 2021-03-17 . https://web.archive.org/web/20210317180710/https://www.reuters.com/article/us-usa-china-telecom-idUSKBN2B92FE . live .
  41. News: 2022-01-28 . US bans telecom giant China Unicom over spying concerns . en-GB . BBC . 2022-01-28 . 2023-12-07 . https://web.archive.org/web/20231207183127/https://www.bbc.com/news/business-60164747 . live .
  42. News: Shepardson . David . 2022-09-20 . U.S. agency adds China Unicom, Pacific Networks to national security threat list . en . . 2022-09-21 . 2023-11-08 . https://web.archive.org/web/20231108050348/https://www.reuters.com/business/media-telecom/us-agency-names-chinese-telecom-firms-national-security-threat-list-2022-09-20/ . live .
  43. Web site: 2016 Annual Report. 14 February 2017. 25 August 2017. PCCW. 25 August 2017. https://web.archive.org/web/20170825191450/http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0214/LTN20170214299.pdf. live.
  44. News: Kirchgaessner. Stephanie. 2020-12-15. China suspected of spying on Americans via Caribbean phone networks. en-GB. The Guardian. live. 2020-12-16. 0261-3077. 2020-12-15. https://web.archive.org/web/20201215233406/https://www.theguardian.com/us-news/2020/dec/15/revealed-china-suspected-of-spying-on-americans-via-caribbean-phone-networks.

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