China United Telecommunications Corp Ltd, the listed unit of the country's second-largest mobile phone operator, said Wednesday it received shareholders' approval to sell new shares in a 3-for-10 placement to fund the purchase of more code division multiple access business from its parent.

Shareholders voted for the sale of 1.5 billion yuan-denominated A shares on the Shanghai stock market, said China Unicom in a statement Wednesday.

"CDMA business is critical to China Unicom as the company aims to upgrade its CDMA network to the third generation telecommunication system," said Chen Jinqiao, a senior official at China Academy of Telecommunication Research, a think tank under the Ministry of Information Industry.

China Unicom aims to attract more subscribers from its arch rival China Mobile Communications Corp, the nation's biggest mobile operator, to its CDMA service. The service provides handset users with more data features such as pictures and games download and stock information.

Local-currency A shares of China Unicom rose 2.74 percent to 4.12 yuan (49.63 US cents) yesterday, compared with a 2.28 percent gain for the benchmark Shanghai Composite Index.

The price of new shares will be set at a 10 percent to 30 percent discount to its average market price over the past 20 trading days before the official release of the sale prospectus, said China Unicom.

"The deal will be completed by the end of the first half of this year," said Wang Jianzhou, China Unicom's chairman.

In the first quarter of this year, China Unicom's profit rose 8.5 percent year-on-year to 1.4 billion yuan, while revenue reached 19.59 billion yuan, a jump of 22.6 percent from a year ago.

China Unicom, which is also traded in Hong Kong, attracted an additional 2.7 million CDMA subscribers to hit 21.6 million by the end of March.

(China Daily May 13, 2004)