FLEDGLING Chinese telecommunications network United Telecommunications Co (Unicom) will install 500,000 telephone lines in Shanghai over three years through a US$300 million joint venture with Singapore Telecommunications. As part of its ambitious expansion plans, Unicom plans to establish a joint-venture company in October with Singapore Telecom International, Singapore Telecom's overseas investment arm, through an investment vehicle of its own. Because foreign companies are not allowed to invest directly in Chinese telecommunications networks, the joint venture will be responsible for installing the lines while Unicom will run the operation and share profits. Liu Zhenyuan, Unicom's chief representative in Shanghai, said yesterday he expected 100,000 telephone lines could be installed by the end of the year because the companies had already drawn up detailed plans. Singapore Telecom signed a memorandum of understanding with Unicom earlier this month. In April, it formed a separate joint venture to build China's first nationwide paging network. Singapore Telecom and Unicom are also going to work together to build a telecommunications network for the Singapore-Suzhou Township in Jiangsu province. Speaking after the morning session of the Financial Times Asia-Pacific Telecommunications conference in Hong Kong, Mr Liu said the joint venture would install 100,000 telephone lines and create a Global System for Mobile Communications network initially capable of handling 10,000 subscribers. That would require an investment of about $75 million. Unicom expects to launch a cellular telephone service in Shanghai on July 15, using part of the Ministry of Posts and Telecommunications' network. The network, which will have an initial capacity of 20,000 subscribers, will be expanded to a 50,000 subscriber capacity by the end of the year through a $26 million joint-venture cellular telephone project with Bell Atlantic. Initial construction in Beijing, Tianjin, Shanghai and Guangzhou is already under way. About 18 smaller cities may be included later. Bell Atlantic established a 12-year joint venture in October last year with Unicom investment vehicle Shanghai Science and Technology Investment Corp. Last month, Shanghai Science signed a contract with Unicom, which will operate the network. Bell Atlantic approved the agreement this month. Mr Liu said Unicom had promised to return the $26 million investment to the joint venture within five years. After that, the venture would receive 65 per cent of the network's profits - using Chinese accounting standards - while Unicom would keep 35 per cent.