11:14     CHINA UNICOM<00762> - Announcement (13)                             

    financial years ending 31 December 2005 and 2006.                         
                                                                              
    (C)                                                                       
    New Comprehensive Operator Services Agreement                             
    (i)                                                                       
    Pursuant to an agreement dated 24 March 2005 (the New Comprehensive       
    Operator Services Agreement), Unicom New Guoxin agrees to enter into      
    various service arrangements, including the cellular subscriber           
    value-added services, the `10010' customer services and the agency        
    services, with the A Share Company on the basis that the A Share          
    Company will have the right to transfer its rights and obligations        
    under the agreement to the New Operating Entity. Unicom New Guoxin        
    shall provide services to the A Share Company on arm's length terms       
    and on terms no less favourable than the terms of its service             
    provided to any member of Unicom Group or any other independent third     
    party. If there exists in the same region independent third parties       
    which can provide the same services of a better quality or at a lower     
    price to the A Share Company, the A Share Company shall be entitled       
    to terminate the service by written notice to Unicom Group without        
    any compensation. Completion of the agreement is subject to, inter        
    alia, A Share Company's independent shareholders' approval. The           
    agreement provides that the initial term shall be two years               
    commencing from 1 January 2005 and is renewable for terms of two          
    years at the option of the New Operating Entity.                          
                                                                              
    (ii)                                                                      
    Pursuant to a transfer agreement dated 24 March 2005, the A Share         
    Company agrees to transfer to the New Operating Entity, all of its        
    rights and obligations under the New Comprehensive Operator Services      
    Agreement. Under the transfer agreement, the A Share Company will         
    cease to be a party to the New Comprehensive Operator Services            
    Agreement, and the New Operating Entity will become a party to it in      
    place of the A Share Company. Following the transfer, the New             
    Operating Entity will exercise and enjoy all the rights of the A          
    Share Company arising under the New Comprehensive Operator Services       
    Agreement in substitution of the A Share Company as if the New            
    Operating Entity had at all times been a party to the New                 
    Comprehensive Operator Services Agreement. Completion of the transfer     
    agreement is subject to, inter alia, Independent Shareholders'            
    approval.                                                                 
                                                                              
    (1)                                                                       
    Cellular subscriber value-added services                                  
    Background                                                                
    Pursuant to the New Comprehensive Operator Services Agreement,            
    Unicom New Guoxin will use its paging network, equipment and              
    operators to provide operator-based comprehensive value-added             
    services for the New Operating Entity, including `Unicom Assistant'       
    services.                                                                 
                                                                              
    Pricing standards                                                         
    Pursuant to the New Comprehensive Operator Services Agreement, the        
    New Operating Entity shall retain 40% of the revenue generated from       
    the value-added services provided to the Group's subscribers (and         
    actually received by the New Operating Entity) and allocate 60% of        
    such revenue to Unicom New Guoxin for settlement, on the condition        
    that such proportion for Unicom New Guoxin shall not be higher than       
    the average proportion for independent value-added telecommunications     
    content providers who provide value-added telecommunications content      
    to the Group in the same region.                                          
                                                                              
    Comparison with old pricing standards                                     
    Pursuant to the Old Comprehensive Operator Services Agreement, in         
    relation to the settlement of charges for the supply of                   
    operator-based comprehensive value-added services between the Group       
    and Unicom New Guoxin, the respective branches of Unicom New Guoxin       
    and the Group may agree on the proportion for sharing the revenue         
    derived (and actually received by the Group) from value-added             
    services, on the condition that such agreed proportion for Unicom New     
    Guoxin shall not be higher than the average agreed proportion for         
    independent value-added telecommunications content providers who          
    provide value-added telecommunications content to the Group in the        
    same region. Subject to the foregoing condition, the proportion of        
    revenue sharing may be adjusted annually.                                 
                                                                              
    The new measure for the value-added services fees for cellular            
    subscribers as set out in the New Comprehensive Operator Services         
    Agreement is determined by negotiation by the parties to the New          
    Comprehensive Operator Services Agreement on the basis of the             
    following factors:                                                        
                                                                              
    (a)                                                                       
    The cellular value-added services arrangements between the Group and      
    Unicom New Guoxin have a strong `business cooperation' character. The     
    contribution by the cooperating parties shall have an important           
    influence on the sharing proportion as pricing standard; and              
                                                                              
    (b)                                                                       
    In order to comply with the pricing principles for maintaining the        
    profit margin, the service providers shall maintain reasonable profit     
    margin.                                                                   
                                                                              
    Historical information                                                    
    For the year ended 31 December 2004, approximately RMB859 million