China United Telecommunications Corporation Limited (600050), or China Unicom, which had trading of its stock temporarily suspended due to the telecommunication industry reshuffle, will see the suspension continue until announcements regarding its major assets reorganisation are revealed.

In response to the call for deepening the reform and reorganisation of telecommunication industry, China Unicom stated that subsidiaries under the company had started negotiations regarding selling its CDMA business to China Telecom and its merger with China Netcom Group Corporation (Hong Kong) Ltd.

On 24 May, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Finance made an announcement regarding the reform of telecommunication industry, in which China Telecom was encouraged to acquire CDMA network (including assets and customers) from China Unicom. China Unicom was encouraged to merge with China Netcom. After the streamlining and reshuffle of the telecommunication industry, three third-generation (3G) licenses will be issued.

China Unicom has approved resignations of Shang Bing and Mian Jianhua, two senior managers of the company and the two senior managers will assume senior staff positions in China Telecom. Prior to the suspension of trading in its shares, China Unicom closed at RMB 9.74, up 5.18% on the day.

Source: China Business News

Date: 26 May 2008

CN01/MZ/AR/KM