China Unicom

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]: 217

China United Network
Communications Group

Native name	中国联合网络通信集团有限公司
Company type	State-owned enterprise
Traded as	SSE: 600050^[nb 1] SEHK: 762 Hang Seng Index component
ISIN	HK0000049939
Industry	Telecommunications
Founded	18 June 1994; 29 years ago (1994-06-18)^[1]
Founder	Ministry of Railways Ministry of Electronics Industry Ministry of Electric Power Industry
Headquarters	Beijing, China Shanghai, China
Area served	Mainland China, Hong Kong
Products	Fixedline telephony mobile telephony Internet access digital television
Revenue	292,185,290,000 renminbi (2018)
Owner	Chinese Central Government
Subsidiaries	China United Network Communications (53.78%) → China Unicom (H.K.) PCCW (18.46%)
ASN	4837
Traffic Levels	10-20 Tbps^[2]
Website	www.chinaunicom.com
Footnotes / references 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]

China United Network Communications Group Co., Ltd.
Simplified Chinese	中国联合网络通信集团有限公司
Traditional Chinese	中國聯合網絡通信集團有限公司
Transcriptions
China Unicom
Simplified Chinese	中国联通
Traditional Chinese	中國聯通
Transcriptions Standard Mandarin Hanyu Pinyin Zhōngguó Liántōng
China Unicom Group
Simplified Chinese	联通集团
Traditional Chinese	聯通集團
Transcriptions

History

China Unicom (then known as Chinese: 中国联合通信有限公司; pinyin: Zhōngguó liánhé tōngxìn yǒuxiàn gōngsī) was founded as a state-owned enterprise in 1994^[4]: 217 by the Ministry of Railways, the Ministry of Electronics and the Ministry of Electric Power Industry;^[5] 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]: 24–25} The project aimed to promote universal telecommunications and internet access in rural China.^{[6]: 24–25} The program successfully extended internet infrastructure throughout rural China and promoted development of the internet.^[6]: 25

China Unicom has operated a CDMA network in Macau since October 18, 2006^[7] and internet services in North Korea since 2010.^[8] As of the end of April 2008^[update], 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.^{[citation needed]}

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.^{[citation needed]}

The intermediate parent company "China Unicom (Hong Kong) Limited" was "China Unicom (BVI) Limited", As of 31 December 2001^[update], 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] As of 31 December 2002^[update], state-owned China Unicom Group owned 74.6% shares of the A share company,^[14]: 8 in turn the A share company owned 73.84% of the BVI company.^[14]: 23 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][non-primary source needed]} 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.^{[citation needed]}

In July 2009, China Unicom signed a $700 million deal with infrastructure vendor Ericsson to upgrade the company's GSM network.^{[citation needed]}

China Unicom has operated an internet service in the North Korea since 2010.^[8]

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]: 379

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),^{[26]: 379 [27]} As of 31 December 2016^[update] 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.)".^[26]: 62

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 China Structural Reform Fund [zh], state-controlled listed company China Life Insurance, a private equity fund (Chinese: 腾讯信达有限合伙企业; lit. 'Tencent–Cinda Limited Partnership') that was owned by China Cinda Asset Management and a company related to Tencent,^{[nb 2]} a private equity fund partially owned by Baidu^{[nb 3]} and Industrial Bank (Chinese: 百度鹏寰投资合伙企业), a private equity fund that related to JD.com (Chinese: 京东三弘企业管理中心; lit. 'Jingdong Sanhong'),^{[nb 4]} a public company Ali Venture Capital (Chinese: 阿里创业投资),^{[nb 5]} a public company Suning Commerce Group and three minor private equity funds that was subscribed by companies such as Kuang-Chi and CRRC Group.^[34][35]

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).^[36]

Establishment of China Unicom Global Limited

China Unicom Global Limited is a wholly owned subsidiary of China United Network Communication Group Company Limited. It was established on 24 June 2015, with its headquarter in Hong Kong. China Unicom Global is aimed to deliver direct and dedicate local support to customers outside Mainland China, including Asia Pacific, Americas, Europe, South Africa and the Middle East.^{[citation needed]}

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.^[37]

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.^[38] 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.^[39][40]

In October 2020, the Federal Communications Commission (FCC) requested the United States Department of Justice report whether China Unicom poses a "national security risk".^[41]

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.^[42][43] In consequence of the order, the New York Stock Exchange delisted China Unicom in January 2021.^[44]

In March 2021, the FCC initiated proceedings to revoke China Unicom's authorization to operate in the U.S. due to "national security" concerns.^[45] 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.^[46] In September 2022, the FCC added China Unicom to a list of companies considered "national security threats".^[47]

Equity investments

As of 31 December 2016

• PCCW (18.46%, held by unlisted portion of China Unicom Group)^[48]
• Telefónica (1.27%, held by Hong Kong listed subsidiary "China Unicom (H.K.)")^[26]

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. China Unicom strongly denied the allegations.^[49]

See also

• Communications in China
• Telecommunications industry in China
• List of telephone operating companies

Footnotes

1. See §Stock for the listing structure of the company.
2. An indirect unit holder of the fund (Chinese: 深圳市腾讯产业投资基金; lit. 'Shenzhen Tencent Industry Investment Fund'), was owned by some managers of Tencent. It was stated as a "new OPCO" (new operating company) of Cayman-incorporated listed company Tencent Holdings.^[29]
3. One of the unit holder of the fund was indirectly owned by Baidu Netcom Science Technology (Chinese: 百度网讯科技); the stake of Baidu Netcom was 99.5% owned by Robin Li; the stake was pledged to Baidu Online Network Technology (Beijing) (Chinese: 百度在线网络技术(北京)), an indirect subsidiary of Cayman-incorporated Baidu Inc., thus it was considered as part of Baidu Group.^[30] Another indirect unit holder (Chinese: 北京鼎鹿中原科技), owned by some of the managers of Baidu, was linked to Baidu by the Chinese media, but Baidu denied to comment.^[31]
4. The indirect unit holder of the private equity fund (Chinese: 江苏京东邦能投资管理有限公司; lit. 'Jingdong Bangneng Investment Management') was 45% owned by Liu Qiangdong founder of JD.com (Jingdong) and 55% by Sun Jiaming (Chinese: 孙加明), a senior manager of JD.com. Jingdong Bangneng was listed as a consolidated variable interest entity of JD.com^[32]
5. The stake of the company was 80% owned by Jack Ma, but also pledged to Alibaba Group. It was considered as a subsidiary and/or consolidated entity of Alibaba Group.^[33]

References

1. "2016 Annual Report" (PDF) (in Chinese). China United Network Communications Limited. 16 March 2017. (PDF) from the original on 25 August 2017. Retrieved 25 August 2017.
2. China Unicom. "PeeringDB". PeeringDB. from the original on February 8, 2023. Retrieved October 31, 2022.
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4. Roach, Stephen S. (2022). Accidental Conflict: America, China, and the Clash of False Narratives. New Haven: Yale University Press. doi:10.12987/9780300269017. ISBN 978-0-300-26901-7. JSTOR j.ctv2z0vv2v. OCLC 1347023475.
5. "关于同意组建中国联合通信有限公司的批复" (Press release) (in Chinese). State Council (China). 14 December 1993. from the original on 25 August 2017. Retrieved 25 August 2017.
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41. Shepardson, David (2020-10-16). "FCC asks Justice Department to weigh in on China Unicom U.S. operations". Reuters. from the original on 2020-10-18. Retrieved 2020-10-18.
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44. Mozur, Paul (2021-01-01). "New York to Delist Chinese Telecom Firms in Symbolic Shift". The New York Times. ISSN 0362-4331. from the original on 2021-01-01. Retrieved 2021-01-01.
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46. "US bans telecom giant China Unicom over spying concerns". BBC. 2022-01-28. from the original on 2023-12-07. Retrieved 2022-01-28.
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External links

• Business data for China Unicom:
  • Bloomberg
  • Google
  • Reuters
  • Yahoo!

 

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• Official website