Eastern Communications' B shares failed to shine on their debut on the Shanghai Stock Exchange's B-Share Index yesterday, breaking the hold that newcomers to the exchange usually had over investors. China's top mobile telephone maker closed at its issue price of 80 US cents after opening at 82 cents on heavy turnover. About 12.22 million Eastern Communications shares worth US$9.85 million changed hands yesterday - accounting for 52 per cent of total turnover of Shanghai B shares. The company offered 100 million B shares for sale, or 29.41 per cent of the company's enlarged share capital. An analyst with a European brokerage in Shanghai said: 'I had expected the stock to go up on the first day of trade and was surprised it didn't.' Sun Hung Kai Securities' senior manager of institutional sales, Joyce Leung Ho-kit, said the initial frenzy for mainland telecom stocks had subsided a bit after the listing of Shanghai Posts and Telecommunications and Chengdu Cable. B-share company Shanghai Posts and Telecommunications is facing stiff competition in the domestic market, while soaring material costs have eroded earnings of Chengdu Cable, an H-share company. Analysts say Eastern Communications' heavy reliance on Motorola of the United States, its joint venture partner, would limit its future expansion. 'The company has done a good job in manufacturing mobile phones. They are able to make them in large quantities, but their technology is limited to manufacturing,' the Shanghai-based analyst said. Ms Leung said the company had better take a more pro-active stance towards future co-operation with Motorola. To avoid being a manufacturing base for foreign companies, Eastern Communications has earmarked a portion of its proceeds of its share sale to develop CDMA digital cellular subscriber products. It will also develop its own research and development projects over the next three years in co-operation with an independent research institute in China. Despite concerns of fierce competition, analysts were much more comfortable with Eastern Communications' outlook when it came to comparison drawn with Shanghai Posts and Telecommunication. An analyst with J & A Securities said: 'Shanghai Posts face severe competition in products like programme-controlled exchange equipment.' In the five years to 1995, the average annual growth rate of cellular mobile-phone subscription reached 189 per cent, the highest in the world. Still, the penetration rate of 0.13 per cent in 1994 was among the lowest in Asia. Eastern Communications had a 22 per cent market share of China's mobile-phone system market, and 20 per cent of the mobile-handset market. Last year, the company sold nearly 400,000 cellular mobile handsets in China, where there were 3.62 million mobile-phone subscribers.