Network Switching Worries China Unicom (NYSE:CHU), Threatens To Freeze Accounts
Tuesday, November 23, 2010 3:28 PM

China United Network Communications Group (NYSE: CHU), China's only mobile operator offering Apple Inc's (NASDAQ: AAPL) iPhone, is very disturbed with customers replacing its SIM with its rival's network on Apple iPhones.

The company has warned that it will take strict actions against those who will separate the bundled subscriber identity module card from iPhones. Unicom Group has announced on its website that customers may get their deposits frozen if they indulge in such activities. The company said that iPhone4 is in short supply because some buyers purchase them and resell them after separating the SIMs.

China Unicom  has entered into an exclusive deal with Apple for iPhones in the country. In the 3G space, it is facing tough competition from its rival China Mobile Communications Corp (NYSE: CHL).

According to data released by the companies, China Mobile added 1.7 million 3G subscribers last month in comparison to Unicom's 1.1 million subscribers.  Apple's iPhone 4 user base has contributed 10 percent of China Unicom's newly added 3G users. So, China Unicom would not like to loss this customer base at any cost.

The pressure is high on China Unicom to restrict Apple iPhone 4 users from switching on to China Mobile's network. Customers of the rival company don't switch over to China Unicom's network. The recently issued warning will help China Unicom to retain its existing subscribers and increase its new subscribers. Currently, there's a huge demand for Apple iPhone 4 in China. 

At the end of last month, China Mobile had a total 575 million mobile phone subscribers including 16.98 million 3G users.On the other hand, Unicom had a 163.8 million mobile subscriber base including 11.66 million 3G customers.

China Unicom's Hong Kong listed unit dropped by 1.7 % to HK$10.28 on Monday, whereas, China Mobile's unit listed with the same market dropped by 1.4% to HK$77.80.

Regarding short supply of Apple iPhone4 in the country, China Unicom has said that the shortage may continue till the end of this year.



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