A number of China Unicom's (NYSE: CHU; 0762.HK; 600050.SH) provincial and municipal subsidiaries recently began offering low-cost monthly calling plans. In late March, Zhejiang Unicom unveiled a set of 2G "Suiyi Da" ("Call As You Like") calling plans starting at RMB 3 per month for free calling to Unicom phones throughout the province. Shortly afterwards, Guangxi Unicom announced plans starting at RMB 3 for free outgoing calls from any location in the user's home district to all Guangxi Unicom mobile phones, RMB 5 per month for free outgoing calls from the subscriber's home municipal or county area (within the same area code), to all Guangxi Unicom mobile phones and RMB 10 per month for free outgoing calls to all Guangxi Unicom mobile phones from any location throughout the province.

An industry source revealed that 2G revenues dropped by several hundred million RMB for certain Unicom provincial and municipal subsidiaries, and that some of the operators whose 2G revenues had dropped most sharply had been criticized and ordered to take measures to prevent further losses. "2G subscriptions are what puts food on the table for Unicom," the source said, "while 3G subscriptions serve only to put slightly nicer food on the table. As long as Unicom is slow to grow its 3G subscriber base, an inability to maintain its 2G subscriber base will cut deeply into its cash flow."

Source:marbridgeconsulting