A CHINA United Telecommunications executive said Tuesday that the company had subsidized the mobile phone purchases of most new subscribers to its CDMA network.

　　Vice-President Tong Jilu said 51 percent of the company’s CDMA users are technically “renting” their mobile phones under plans where they commit to spend a certain amount of money on their phone bills over a period of time, but don’t have to pay for the phone itself.

　　“There are many agents who purchase mobile handsets or provide customers with subsidies. These agents in turn get a portion of the monthly fee from Unicom,” he said.

　　Executives from the mobile carrier have previously been reluctant to comment about its use of handset subsidies for CDMA, and Tong emphasized that the plans are decreasing in importance.

　　“We are continuously increasing the amount of subscribers who buy a CDMA handset first,” he said.

　　Analysts have already raised questions about how the subsidies may be distorting the financial results reported for the CDMA network by China United’s Hong Kong-listed unit, China Unicom Ltd., which is leasing a portion of the network.

　　China Unicom has trumpeted the fact that its average revenue per user (ARPU) of 106.5 yuan (US$12.86) a month for CDMA subscribers is much higher than the 71.6 yuan a month for its GSM network, which has many more subscribers.

　　But analysts say the CDMA subsidies make it difficult to compare the two.

　　“With subsidies fueling subscriber growth and ARPU numbers difficult to evaluate, it is hard to tell just how meaningful the acceleration in CDMA subscriber growth is and how valuable China Unicom’s new CDMA subscribers really are,” wrote Ted Dean of consultants BDA China Ltd. in a recent article. (SD-Agencies)