11:13 CHINA UNICOM<00762> - Announcement (10) New Operating Entity shall receive 50% of all roaming revenue to be received under such international roaming arrangements. Historical information For the year ended 31 December 2002, the roaming revenue derived and roaming expenses incurred by the Group under the Old Comprehensive Services Agreements amounted to approximately RMB398.26 million (HK$375.33 million) and RMB156.72 million (HK$147.69 million) respectively. For the year ended 31 December 2003, the roaming revenue derived and roaming expenses incurred by the Group under the Old Comprehensive Services Agreements amounted to approximately RMB251.01 million (HK$236.55 million) and RMB137.97 million (HK$130.03 million) respectively. For the year ended 31 December 2004, the roaming revenue derived and roaming expenses incurred by the Group under the Old Comprehensive Services Agreements amounted to approximately RMB26.70 million (HK$25.17 million) and RMB23.81 million (HK$22.44 million) respectively. No Cap Amount The Company considers that the transaction value of the interconnection and roaming arrangements shall not be subject to any annual cap amount for the following reasons: The Group's revenue depends on growth in call revenue and in its subscriber base on its various networks. Any such growth will necessarily result in the increased use of interconnection and roaming arrangements. Neither the Group nor Unicom Group will be able to control it as it depends entirely on subscriber usage. Any cap on these transactions will therefore limit the Group's ability to conduct or expand its business in the ordinary course. In addition, the prices for interconnection and roaming arrangements are based on standardised tariffs set by the MII (which is applicable to other cellular operators in the PRC) or internal tariffs agreed between the Group and Unicom Group that are more favourable to the Group than the standardised tariffs. The Company has applied to the Hong Kong Stock Exchange for waiver from the requirements under Rule 14A.35(2) of the Listing Rules for imposing a cap on the interconnection and roaming arrangements for each of the financial years ending 31 December 2005 and 2006. (5) Mutual provision of premises Background The New Operating Entity and Unicom Group will provide to each other premises (including premises, air conditioning, electricity, power generating equipment and other relevant auxiliary facilities) belonging to the New Operating Entity or Unicom Group, or leased to the New Operating Entity or Unicom Group by third parties upon the request of the other party from time to time. Pricing standard Apart from cases where the premises have been leased from independent third parties, the rental amount in each case is based on the lower of depreciation costs and market prices for similar premises in that locality. However, the New Operating Entity may choose to charge Unicom Group market prices for premises rented to Unicom Group. In cases where the premises have been leased from an independent third party, the rental amount is the amount that is payable under the head lease. Charges for any air-conditioning and electricity are included in the rental amount. In the case of shared premises, the rent is split in proportion to the respective areas occupied by the parties. Historical information For the years ended 31 December 2002, 2003 and 2004, the total rents for premises leased by Unicom Group to the Group pursuant to the Old Comprehensive Services Agreements amounted to approximately RMB21.25 million (HK$20.03 million), RMB22.54 million (HK$21.24 million), and RMB29.04 million (HK$27.37 million) respectively, whereas the total rents for premises leased by the Group to Unicom Group pursuant to the Old Comprehensive Services Agreements amounted to approximately RMB3.43 million (HK$3.23 million), RMB4.60 million (HK$4.34 million), and RMB3.51 million (HK$3.31 million) respectively. Chesterton Petty, an independent property valuer, has confirmed that the rental amounts payable under the above arrangements are fair and reasonable and do not exceed the market rent, with respect to the premises leased to the New Operating Entity, and do not fall below the market rent, with respect to the premises leased to Unicom Group. Cap amount For each of the financial years ending 31 December 2005 and 2006, the total rents for premises to be paid by the New Operating Entity pursuant to the New Comprehensive Services Agreement shall not, in aggregate, exceed the cap amount of RMB39.21 million (HK$36.95 million) and RMB52.93 million (HK$49.88 million) respectively, whereas the total rents for premises to be paid by Unicom Group shall