China Unicom yesterday launched data services based on the GPRS standard, which could give the company a leg-up in the booming value-added telecoms service market.

The GPRS data services will enable Unicom's GSM users to surf the mobile Internet, send MMS (multimedia messaging service) messages and download data, including music, using their mobile phones.

Unicom, the smaller of China's two cellular operators, has been operating cellular networks based on second-generation (2G) mobile telephony standards, GSM and CDMA.

The CDMA networks have already been upgraded to the high-speed CDMA1x-2000, usually billed as a 2.75G service, which offers users a number of data services, such as mobile Internet access and MMS.

But its GSM subscribers could only make voice calls and send short text messages.

An upgrade from GSM to GPRS, a 2.5G mobile technology, could boost the competitiveness of Unicom's GSM networks, said company vice-president Li Gang.

The upgrade marks Unicom's shifting focus from the CDMA service to GSM networks. The company has been investing heavily on CDMA networks to snap up subscribers from its larger rival, China Mobile, while investing little in its GSM networks.

Since last year, however, Unicom has stepped up its investment in GSM networks.

Some industry observers say this is as a sign Unicom might sell its CDMA networks to fixed-line carrier China Telecom and focus solely on GSM services.

China Telecom Chairman Wang Xiaochu has publicly expressed interest in buying one of Unicom's two cellular networks. Unicom denies it is in talks to sell to the operator.

Rumors suggest Unicom will scale down or cease investment in CDMA networks this year. Li denied the reports, saying Unicom will continue its investment, but would not elaborate.

He added that the GSM service offers much untapped potential for Unicom.

Hong Kong-listed Unicom had 110 million GSM subscribers by March, an increase of 16 percent year-on-year. The number of CDMA subscribers totaled 37.7 million by March. China Mobile had 316 million subscribers by March.

Unicom's GPRS service is now available in 70 cities across the country and will be expanded to 129 cities on June 18.

Tong Xiaoyu, head of Unicom's value-added service unit, said the company will soon launch a number of new data services based on GPRS, such as banking, instant messaging, as well as e-mail and mobile stock services.

The soaring stock market has boosted demands in China for mobile data services, such as real-time stock quotes and transactions on mobile phones.

The Shanghai Composite Index has quadrupled after a five-year slump that ended in July 2005. Mobile stock, enabled by CDMA services, is already very popular among customers, according to Unicom.

Value-added services have become a new revenue stream for both China Mobile and China Unicom. China Mobile last year generated 23.5 percent of its total revenue from the value-added services, compared to 20.6 percent in the previous year. Unicom generated 21.5 percent of its CDMA revenue from value-added services, or non-voice services.

(China Daily?May 18, 2007)