China Unicom would on Friday begin offering pre-paid card services for its CDMA network which significantly undercut the official mobile tariff rate.
The move is the latest in an ongoing price war which is offering users ultra-low tariffs while threatening the profitability of the entire industry.
Unicom's pre-paid services will be trialled over three months in seven affluent provinces and municipalities - Guangdong, Guangxi, Hunan, Jiangxi, Shanxi, Heilongjiang and Chongqing.
A China Unicom spokeswoman said the No 2 carrier will offer three plans catering to customers' varied useage rates.
The plans ranged between 50 yuan (about HK$47.34) and 200 yuan, and offered discounts of 20 per cent to 50 per cent on official rates for voice calls. A plan targeting young consumers offered half price on short messaging services (SMS).
The discounts were such that users who purchased a 200 yuan pre-paid card could get up to 300 yuan worth of value to spend on voice and data traffic.
The lowest pre-paid rate was 30 fen per minute for calling five selected numbers, compared with the official tariff of 60 fen per minute set by the Ministry of Information Industry.
Having set a target to sign up 11.4 million new CDMA users this year, China Unicom is betting on the pre-paid plans to boost its CDMA subscriber growth.
JP Morgan analyst Edison Lee did not expect CDMA pre-paid plans to attract a strong consumer response as many GSM packages were more attractive.
He expected China Unicom's local branches to gradually launch more aggressive CDMA offerings, especially in places where GSM networks had limited capacity.