11:10     CHINA UNICOM<00762> - Announcement (4)                              

    for 2004. The Minimum Lease Fee for 2006 shall be 90% of the total        
    amount of lease fee paid by the New Operating Entity to Unicom New        
    Horizon pursuant to the New CDMA Lease for 2005. The level of lease       
    fee under the New CDMA Lease has been set by reference to the             
    Company's view of the industry trends, including CDMA subscribers,        
    ARPU levels and so on.                                                    
                                                                              
    The lease fee and Minimum Lease Fee in any Additional Term shall be       
    re-negotiated by the parties to the New CDMA Lease.                       
                                                                              
    The lease fee shall be initially calculated on the basis of the           
    unaudited CDMA business income generated by the New Operating Entity      
    during each quarter and shall be paid (or procured to be paid)            
    quarterly in arrears by the New Operating Entity to Unicom New            
    Horizon within 30 days following the end of each quarter. The New         
    Operating Entity shall issue a report in respect of its unaudited         
    quarterly CDMA business income to Unicom New Horizon within 20 days       
    from the end of each quarter. The report shall be prepared in a           
    specified format and contain the unaudited quarterly CDMA business        
    income generated by the New Operating Entity and the total lease fee      
    payable by the New Operating Entity, calculated on the basis of the       
    CDMA business income.                                                     
                                                                              
    When the Company conducts its annual audit, Unicom New Horizon and        
    the New Operating Entity shall adjust and settle the following as         
    soon as practicable:                                                      
                                                                              
    (a)                                                                       
    in the event that the lease fee of any year calculated on the basis       
    of the audited CDMA business income is greater than the lease fee of      
    that year paid by the New Operating Entity and calculated on the          
    basis of unaudited quarterly CDMA business income of the New              
    Operating Entity, the New Operating Entity shall pay the difference       
    to Unicom New Horizon as soon as practicable;                             
                                                                              
    (b)                                                                       
    in the event that the lease fee of any year calculated on the basis       
    of the audited CDMA business income is less than the lease fee of         
    that year paid by the New Operating Entity and calculated on the          
    basis of the unaudited quarterly CDMA business income of the New          
    Operating Entity, Unicom New Horizon shall refund the difference to       
    the New Operating Entity as soon as practicable,                          
                                                                              
    provided, in the event that the lease fee paid by the New Operating       
    Entity in respect of the relevant year is less than the Minimum Lease     
    Fee upon the above payment adjustment and settlement between Unicom       
    New Horizon and the New Operating Entity, the New Operating Entity        
    shall pay the difference to Unicom New Horizon as soon as                 
    practicable.                                                              
                                                                              
    All Lease Fee shall be made in Renminbi.                                  
    Comparison with the Old Lease Fee                                         
    Pursuant to the Old CDMA Leases, lease fee of Capacity per                
    subscriber was calculated on the assumption that all Capacity was         
    leased to enable Unicom New Horizon to recover the Network                
    Construction Cost (as defined in section headed `Network Construction     
    Cost and Operating Cost' below) within seven years, with an internal      
    rate of return on its investment of 8%.                                   
                                                                              
    The new lease fee under the New CDMA Lease has been determined by         
    all parties to the New CDMA Lease taking into account the following       
    factors:                                                                  
                                                                              
    (a)                                                                       
    Under the Old CDMA Lease, the lease fee of the CDMA Network was           
    calculated based on the Network Construction Cost. In the future,         
    construction of the CDMA Network will focus on enhancing the network      
    quality by investing in the optimisation of network, indoor projects      
    and the development of new business and new functions. These projects     
    and investments will not create new Capacity. As a result, these          
    investments cannot be reflected in the existing method of leasing the     
    network Capacity;                                                         
                                                                              
    (b)                                                                       
    The pricing method under the Old CDMA Leases was determined at the        
    initial stage of network construction which had taken into                
    consideration the fact that the CDMA business was still in the            
    developing stage at that time and adoption of the cost-driven pricing     
    was appropriate to the situation of the Group at that time. Large         
    scale construction of the CDMA Network has presently been completed.      
    After three years of operation, the Group also has a good grasp of        
    the CDMA income and cost. Therefore, more emphasis should be placed       
    on the operation of the business in respect of the new pricing method     
    and income should be made a driving factor;                               
                                                                              
    (c)                                                                       
    The determination of the amount of Capacity leased in the model of        
    leasing the CDMA Network Capacity under the Old CDMA Leases required      
    forecasting of the development of CDMA subscribers and considering a      
    reasonable utilisation rate (i.e. the number of actual CDMA               
    subscribers divided by the amount of Capacity leased). The model of       
    leasing network Capacity should be more practicable;                      
                                                                              
    (d)