China United Telecommunications (China Unicom) plans to aggressively expand its pre-paid card service to cover at least 150 mainland cities this year after the service's initial launch in Beijing, Shanghai and Guangdong last month, according to Warburg Dillon Read.
The ambitious drive is part of the overall strategy of the country's second-largest carrier to capture a bigger slice of the domestic telecoms market, particularly in the fast-growing mobile-phone and Internet-related services sectors.
The move is expected to be echoed by China Telecom, the mainland's predominant telecom operator which listed its mobile phone arm in Hong Kong in 1997, according to the brokerage's latest research report.
As part of the move, China Unicom is planning a US$3 billion overseas listing in Hong Kong this year, in a bid to feed its expansion plans and raise its international profile.
'Pre-paid cards are very useful in reducing bad debts and reaching low-income groups, including students,' Warburg Dillon Read said, adding that China Unicom was taking the lead in starting the pilot scheme.
Nonetheless, the brokerage said while pre-paid cards had a wider access, the cost per minute of usage was generally higher than those of post-paid products.
