China Unicom (CHU) Raises iPhone Subsidies To Boost Sales

In an attempt to boost demand, China Unicom (ADR) CHU, which is China's No. 2 mobile carrier, has decided to raise subsidies on its sales of Apple's iPhone. “China Unicom has been adding less than 1 million subscribers every month,” said Victor Yip, an analyst with UOB Kay Hian in Hong Kong. “They need to add more soon quickly because their competitors are not easing up.” According to Reuters, China Unicom has been able to add 2.1 million new 3G users in the first quarter of this year to its total of 4.8 million users. Its progress is slower than bigger rival China Mobile which has added 4.3 million users for a total of 7.7 million. China Unicom said it will spend up to 5 billion yuan ($735 million) in phone subsidies this year to attract new 3G customers. In 2009 China's mobile carriers have spent about $21 billion building their 3G networks. They are now impatient to recoup that investment by pushing more users towards the more expensive data service especially as revenue from voice calls falls.