China Telecom is the leading fixed-line telecoms operator while China Unicom ranks No 2 in the mobile business.

The agreements stipulated detailed rules that guarantee the network interconnection and divide service charges between the two carriers.

"This is a major movement to enhance the cooperation between the two companies,'' said Si Furong, spokesman of China Telecom. "It is also one of our preparations for the pending harsh competition after the country opens the telecoms market to overseas companies.''

As the country's largest fixed-line telecoms company, China Telecom owns controlling shares in the fixed-line network resource.

China Telecom is frequently criticized for its monopolized operation, which includes setting up barriers for network interconnection.

Co-operation with China Telecom is a must for newcomers, since the giant controls the most critical gateway to network interconnection -- the fixed-line telephones in some 170 million homes or offices.

"The agreements would also lay sound foundation for China Unicom's pending CDMA (code division multiple access) network,'' said the spokesman.

China Unicom, the country's second biggest mobile carrier, which controls 26 per cent of the market, will kick off China's first CDMA network in the fourth quarter.

"The construction is moving forward smoothly with the first phase project scheduled to finish by the end of October,'' said Wang Yingpei, president of Unicom Horizon, operator of the CDMA business.

The big scale marketing movements would start by the end of this year or early next year, Wang revealed.

In comparison with the GSM (global system for mobile communications) network, which supports China's 125 million mobile phone users, CDMA is said to be more environmentally friendly with lower radiation emission. It also provides higher voice quality and is less expensive than GSM.

China has become the world's biggest mobile telecoms market, and its adoption of the CDMA network encourages the development of CDMA-related businesses.

China Unicom's CDMA network has become an eye-catching project for overseas telecoms equipment makers, as the country's market is one of the few in the world marked by growth rather than downturn.

China Unicom's CDMA network would cover 300 cities and support 15 million users in the present network capacity.

The second phase construction would soon start after completion of the first phase, Wang said.

(China Daily 10/08/2001)