SK Telecom agreed on strategic cooperation on overall mobile business and signed a strategic alliance framework agreement with China Unicom(www.chinaunicom.com, CEO Chang Xiaobing), the second-largest mobile operator in China.

With the approval of the board of directors on June 20, SK Telecom will sign the agreement at China Unicom in Beijing on June 21, 5 p.m. (Korea time) in presence of Shin-Bae Kim, Chang Xiaobing and senior executives from both companies.

Moreover, SK Telecom has concluded to buy $1 billion worth of CB (Convertible Bond) of China Unicom Limited (CUHK), a listed enterprise of China Unicom in Hong Kong. CUHK owns 100 percent of the shares of China Unicom Corporation Limited (CUCL), a substantial mobile operator in China.

With a three-year expiration period, CB can be converted into stocks after a year from the issued date. If converted, SK Telecom acquires 6.6 percent of the whole shares of CUHK.

In the agreement, SK Telecom and China Unicom consented to cooperate in various fields such as handset sourcing, value-added service and platform developing. To strengthen the partnership, they will run a mutual council and a common organization, provide mutual consulting and market information, and share know-how.

In addition, SK Telecom and China Unicom applied a principle of mutual exclusiveness to the agreement that SK Telecom gets sole and exclusive partnership in China until the end of 2007.

The partnership is significant not only in that it is SK Telecom’s first step entering China, the world’s biggest market, but also as it represents the success of Korea’s leading communications service provider in acquiring prior occupation of the Chinese mobile market which will soon open its doors as a result of WTO.

Compared to direct stock investment, CB investment gives SK Telecom the flexibility to react to Chinese policy environment such as the 3G operator appointment in the Chinese mobile market, not to mention helps minimize risks in the investment. In this manner, China Unicom can be regarded as an important partner to SK Telecom.

Shin-bae Kim, the CEO of SK Telecom, said, “Chinese mobile market has great potential both in quality and quantity. With this partnership, we look forward to making significant development in CDMA business of China Unicom. At the same time, SK Telecom is ready to enter Chinese market.”

“The combination of world’s largest market and world’s finest technology will mark a new era in CDMA market worldwide and will also be a turning point for Chinese CDMA business.”

“By embodying and speeding up the cooperation of Korean-Chinese telecommunications, this agreement will facilitate both countries to interact in various fields. It will also give us a firm foothold to expand our global business in near future.” He expects.

Along with the agreement, Korean affiliations such as competent handset manufacturers, content providers, and solution developers are expected to branch out into the Chinese market. Their entrance will contribute rapid advance to China’s telecommunication industry.

SK Telecom has high hopes in the growth potential of the Chinese mobile communications market which is expected to reign in around 600 million new subscribers within the next three years. The neighboring country has also shown great interest in the selection of the 3G mobile operator and the popularity of new value-added services. With these current trends, SK Telecom anticipates the strategic alignment will bring a positive economical effect to the domestic IT market.

As of Dec 2005, China has the biggest mobile market in the world with a 30.3 percent subscription rate, meaning the country has 393 million mobile phone users. (Including PHS subscribers, the subscription rate scores 36.3 percent, in other words 480 million subscribers.) The subscriber growth rate was recorded to be 42% in 2002, and 30% in 2003.

China Unicom is the second-largest mobile operator in China with 130 million subscribers. The company started CDMA service in 2002 with CDMA subscribers exceeding 34 million as of April 2006. The company’s CDMA business went into the black in the third quarter of 2005.

Thus, the combination of SK Telecom’s technology and killer contents and China Unicom’s large subscriber base is expected to create great synergy.

SK Telecom and China Unicom have been partners since 2001 under a contract of global roaming service. In 2004, they established a joint venture called UNISK, China’s first value-added service provider to offer wireless internet service.

South Korean operator SK Telecom today announced a plan for its entry into the lucrative Chinese market. The company has bought $1bn (ВЈ540m) worth of convertible bonds in second placed Chinese operator China Unicom, which can be turned into a 6.6 per cent stake in the company after a year.

But while SKT gets access to the world’s biggest mobile market in terms of subscribers, Unicom also gets a partner with the know how to help it turn around its ailing CDMA business.

Unicom has been criticised for its failure to introduce low-priced CDMA handsets and cutting handset subsidies in a bid to bring its CDMA unit to profitability. The result has been that Unicom’s monthly CDMA net additions for April fell 10.6 per cent month-on-month.

Unicom had 34.2 million CDMA subscribers at the end of May, compared to 99.6 million GSM subscribers. Conversely, leading Chinese operator China Mobile counted 268 million GSM subscribers at the end of the month.

Under the strategic alliance framework agreement, China Unicom and SKT have consented to cooperate on handset sourcing, value-added services and platform developing on the CDMA platform. SKT itself has some considerable expertise in the CDMA space.

Furthermore, Unicom and SKT already have a cooperative relationship dating back to the establishment of UNISK Information Technology Company in 2004, a joint venture engaging in CDMA value-added services in China such as ring tones and games.

SKT and China Unicom have also applied a principle of mutual exclusiveness to the agreement that SKT gets sole and exclusive partnership in China until the end of 2007.

Chang Xiaobing, chairman of China Unicom, said: “We believe that the strategic alliance will facilitate the Company’s future development, enable the Company to provide better services to its CDMA subscribers and create greater shareholder value.”

Along with the agreement, affiliated Korean handset manufacturers, content providers, and solution developers are expected to branch out into the Chinese market, SKT said.

Shin-bae Kim, chief executive of SK Telecom, said: “By embodying and speeding up the cooperation of Korean-Chinese telecommunications, this agreement will facilitate both countries to interact in various fields. It will also give us a firm foothold to expand our global business in near future.”

The agreement extends Nokia’s GSM footprint and leadership in mobile softswitch deployment in China

Nokia, a leading mobile networks supplier, announced today that it has won a GSM network expansion deal with Sichuan Unicom, a subsidiary of China Unicom. The agreement is Nokia’s first with Sichuan Unicom and marks a significant milestone for Nokia in entering the GSM market in Sichuan and West China. The deal also highlights Nokia’s leading position in mobile softswitch systems deployment in the China area.

Under the agreement, Nokia will deploy its GSM radio and core networks, including the Nokia MSC Server mobile softswitch, in 4 cities in the Sichuan Province. Nokia also provides an extensive range of services, including network planning, optimization and rollout services. Deliveries have started and the network expansion will be fully operational by August 2006. The agreement is another significant milestone for Nokia in Sichuan following the Chengdu R&D Center expansion, announced in April 2006.

“We are extremely delighted with our progress in the GSM business and deepening cooperation with mobile operators in China,” said Yuan Wei, Vice President, China Area, Networks, Nokia. “The mobile market and the number of subscribers in China are growing fast and steadily. With our global experience and strong end-to-end localization commitment, we support mobile operators in bringing state-of-the-art mobile services to their customers.”

In addition to this breakthrough agreement, Nokia further points to its leadership in mobile softswitch deployment in China. To date, the Nokia MSC Server System capacity of more than 20 million lines has been put into operation in the Chinese market. The 3GPP compliant Nokia MSC Server System is a cost-optimizing solution within Nokia core networks. It can reduce core networks operating expenditure by 30-70% and provides operators with higher capacity, better transmission utilization, and an ability to offer their subscribers a smooth migration path to 3G and All-IP in the future.

The Nokia MSC Server mobile softswitch is a circuit core network architecture fully compatible with GSM/EDGE and WCDMA 3G. Nokia leads the global mobile softswitch market with over 90 customers for the Nokia MSC Server System, almost 40 of which are already in commercial use. Nokia is one of the first GSM/WCDMA mobile suppliers in the China area, where mobile subscribers are served by the capacity of more than 100 million lines, provided by Nokia’s Mobile Switching Center (MSCi) and MSC Server mobile softswitch.