Don’t Hang Up On Unicom Just Yet: Seeing is Believing

I’ve long been a naysayer on China Unicom (HKEx: 762), buying into the line that the company was a perpetual laggard despite being given the creme de la creme of 3G licenses in the form of permission to build China’s only network based on the globally dominant WCDMA standard. Now I’m not so sure. What’s changed? For one, I’m now in China instead of calling the shots from Hong Kong, which is also where most of the telecoms analysts are based. In the space of a single afternoon, I encountered not one but two friends who were both singing the praises of Unicom 3G to me — something unheard of just years ago when people scoffed at the mere mention of the Unicom name. They also said the company, the sole vendor of Apple’s (Nasdaq: AAPL) iPhone in China, has much improved coverage, another previous complaint. A look at the 3G numbers is also revealing: Unicom has about 30 percent of the 3G market, far better than the 20 percent of the broader market it commands. If it can get its integration issues behind it following its absorption of the former China Netcom, which seems inevitable, Unicom could yet become a force to be reckoned with.