HONG KONG -- China Unicom Limited ("Unicom")(HKSE:0762, NYSE:CHU) announces that to build a stronger integrated telecommunication enterprise with full-service capability and to establish a leading edge based on 3G technologies, Unicom and China Netcom Group Corporation (Hong Kong) Limited ("Netcom") (HKSE:0906, NYSE:CN) are planning a merger, pursuant to which, each share of Netcom will be exchanged for 1.508 shares of Unicom, and each American Depository Shares of Netcom will be exchanged for 3.016 American Depository Shares of Unicom. After the completion of the merger, the enlarged share capital of Unicom will be 237.645 shares. The total consideration of the merger will be approximately HK$439.167 billion based on the closing price of Unicom shares at HK$18.48 before the suspension of trading.

Separately, Unicom announces that in order to further adjust its business model and to redeploy its resources, on June 2, 2008 Unicom, China Unicom Corporation Limited ("CUCL", a wholly-owned subsidiary of Unicom) and China Telecom Corporation Limited ("Telecom") (HKSE:0728,NYSE:CHA) entered into the CDMA Business Framework Agreement, pursuant to which CUCL intends to sell to Telecom Unicom's CDMA business for a total consideration of RMB 43.8 billion.

Concurrently, on June 2, 2008 China United Telecommunications Corporation ("Unicom Group"), Unicom New Horizon Mobile Telecommunications Company Limited ("Unicom New Horizon") and China Telecommunications Corporation ("Telecom Group") entered into the CDMA Network Framework Agreement, pursuant to which Unicom Group and Unicom Horizon intend to sell to Telecom Group the CDMA network for a total consideration of RMB 66.2 billion.

The merger between Unicom and Netcom is in line with the industry trend of convergence between fixed line and wireless businesses. After the transaction is completed, Unicom intends to consolidate the resources and strengths of Unicom and Netcom to achieve economies of scale and better position itself by establishing clearer strategic objectives. In order to achieve a sound and healthy development in the long term, Unicom also plans to focus on technology and product innovation and capital structure optimization to strengthen its market position and to improve its competitiveness. The sale of CDMA business to Telecom is expected to help clarify Unicom's business focus in the future and facilitate the smooth transfer of GSM to 3G by consolidating resources. The merger between Unicom and Netcom is also expected to help Unicom to promptly establish leading technology advantages based on 3G technologies. Unicom management believes that the restructuring will be a new starting point for Unicom's development in the future.

China Unicom Ltd. (NYSE: CHU)