The Board of the Company is pleased to announce the unaudited condensed consolidated

results of the Group for the first three quarters ended 30 September 2008.

China Unicom (Hong Kong) Limited (the “Company”) is pleased to announce the unaudited

condensed consolidated results of the Company and its subsidiaries (the “Group”) for the

first three quarters ended 30 September 2008.

— 1 —

Note

Property, plant and equipment 111,758,892 116,162,165

Goodwill 2,770,983 3,143,983

Other assets 9,697,876 12,855,199

Deferred income tax assets 489,293 426,902

124,717,044 132,588,249

Inventories 827,689 2,528,364

Accounts receivable, net 2,496,480 3,211,154

Prepayments and other current assets 1,732,639 3,516,279

Amounts due from related parties 84,844 109,096

Amounts due from Domestic Carriers 162,288 149,736

Short-term bank deposits 155,867 644,016

Cash and cash equivalents 3,888,393 6,675,476

9,348,200 16,834,121

Assets classified as held for sale 6 12,747,957 —

Share capital 1,439,683 1,436,908

Share premium 64,568,717 64,320,066

Reserves 3,976,367 3,968,515

Retained profits

- Proposed 2007 final dividend — 2,726,858

- Others 31,745,105 24,760,833

101,729,872 97,213,180

— 2 —

Note

Long-term bank loans 3 — 1,660,921

Obligations under finance leases 2,575 3,882

Deferred income tax liabilities 5,109 5,864

Deferred revenue 566,309 1,303,015

573,993 2,973,682

Payables and accrued liabilities 26,930,665 32,031,307

Taxes payable 1,283,996 1,239,512

Amounts due to China United

Telecommunications Corporation 27,875 820,699

Amounts due to related parties 878,380 769,558

Amounts due to Domestic Carriers 652,076 600,283

Current portion of long-term bank loans 3 1,363,659 2,191,382

Current portion of obligations under finance

leases 171 1,448

Advances from customers 6,906,237 11,577,405

Dividends payable 149,000 —

38,192,059 49,231,594

Liabilities classified as held for sale 6 6,311,891 —

— 3 —

Revenue (Turnover)

GSM business 48,452,970 47,148,926

Data and Internet business 2,381,609 2,323,974

Long Distance business 1,605,188 1,451,441

Total service revenue 52,439,767 50,924,341

Sales of telecommunications products 38,770 8,803

Total revenue 52,478,537 50,933,144

Leased lines and network capacities (565,714) (474,441)

Interconnection charges (6,852,571) (6,246,278)

Depreciation and amortisation (16,150,278) (16,547,583)

Employee benefit expenses (4,161,905) (3,881,495)

Selling and marketing (8,195,286) (7,887,796)

General, administrative and other expenses (9,193,542) (8,388,349)

Cost of telecommunications products sold (457,565) (168,070)

Financial gain 108,647 42,226

Interest income 121,809 127,051

Realised loss on changes in fair value of

derivative component of convertible bonds — (568,860)

Other gains - net 83,458 42,392

Income tax expenses 4 (1,905,430) (2,452,753)

Profit from discontinued operations 6 1,680,271 654,893

— 4 —

Equity holders of the Company 6,988,959 5,183,027

Minority interest 1,472 1,054

6,990,431 5,184,081

Earnings per share for profit attributable to the

equity holders of the Company

- basic (RMB) 5 0.512 0.404

- diluted (RMB) 5 0.507 0.400

Earnings per share for profit from continuing

operations attributable to the equity holders

of the Company

- basic (RMB) 5 0.389 0.353

- diluted (RMB) 5 0.385 0.350

Earnings per share for profit from discontinued

operations attributable to the equity holders

of the Company

- basic (RMB) 5 0.123 0.051

- diluted (RMB) 5 0.122 0.050

— 5 —

Net cash inflow from operating activities 22,188,230 24,244,458

Net cash outflow from investing activities (16,411,491) (15,486,851)

Net cash outflow from financing activities (4,615,495) (13,025,259)

Cash and cash equivalents at beginning of

period 6,675,476 12,243,191

Less: Cash and cash equivalents included in

the disposal group 6 (4,581,476) —

Cash and cash equivalents at end of period 3,888,393 8,446,043

Cash balances 3,849 2,623

Bank balances 3,884,544 8,443,420

3,888,393 8,446,043

— 6 —

China Unicom (Hong Kong) Limited (the “Company”) was incorporated as a limited liability company in

the Hong Kong Special Administrative Region (“Hong Kong”), the People’s Republic of China (the “PRC”)

on 8 February 2000. On 15 October 2008, the name of the Company was changed from “China Unicom

are principally engaged in the provision of GSM and CDMA cellular, long distance, data and Internet

services in the PRC. The GSM and CDMA businesses are hereinafter collectively referred to as the

“Cellular Business”. The Company and its subsidiaries are hereinafter referred to as “the Group”. The

address of its registered office is 75th Floor, The Center, 99 Queen’s Road Central, Hong Kong.

Pursuant to an asset transfer agreement entered into between China United Network Communications

Corporation Limited (“CUCL”, formerly known as “China Unicom Corporation Limited”, a wholly-owned

subsidiary of the Company) and China United Telecommunications Corporation (a state-owned enterprise

established in the PRC, hereinafter referred to as “Unicom Group”, the ultimate holding company of the

Company) on 16 November 2007, CUCL agreed to purchase the GSM cellular telecommunication assets and

business, and the CDMA cellular telecommunication business (operated through a leasing of CDMA

network capacity from Unicom New Horizon Mobile Telecommunications Company Limited (“Unicom New

Horizon”, a wholly-owned subsidiary of Unicom Group)) of the Guizhou branch of Unicom Group

(“Guizhou Business”) at a cash consideration of RMB880 million. The consideration for the Business

Combination was determined with reference to the results of a business valuation using methods commonly

used in capital market transactions in the telecommunications industry and the negotiations between the

parties. In addition, pursuant to the asset transfer agreement, the profit or loss of the Guizhou Business for

the period from 31 December 2006 to the effective date of the Business Combination was transferred to

Unicom Group.

The aforementioned Business Combination became effective on 31 December 2007, when all the conditions

to the Business Combination were satisfied and cash consideration was settled by CUCL. Upon the

completion of the Business Combination, the cellular telecommunications business operations of CUCL

have been expanded to all provinces, municipalities and autonomous regions in the PRC.

The Company has adopted merger accounting to account for this Business Combination of entities and

businesses under the common control of Unicom Group in accordance with Accounting Guideline 5 “Merger

Accounting for Common Control Combinations” (“AG 5”) issued by the Hong Kong Institute of Certified

Public Accountants (“HKICPA”).

On 2 June 2008, the Company, CUCL and China Telecom entered into the CDMA business framework

agreement (the “Framework Agreement”), which sets out the terms and conditions on which the Company,

CUCL and China Telecom will proceed with the CDMA business disposal whereby CUCL will sell, and

China Telecom will purchase, the CDMA business operated by the Group. The CDMA business was defined

in the Framework Agreement to include the CDMA mobile telecommunication operations, and its related

assets (including certain jointly used CDMA base stations to be agreed between CUCL and China Telecom)

and liabilities owned and operated by CUCL. Pursuant to the Framework Agreement, the consideration for

the proposed CDMA business disposal is RMB43.8 billion and will be payable by China Telecom to the

Group in cash in three installments and the consideration is subject to a price adjustment mechanism which

is based on the CDMA service revenue generated by the Group for the six months ended 30 June 2007 and

30 June 2008. Based on the CDMA service revenue generated by the Group for the six months ended 30

June 2007 and 30 June 2008, and as agreed by the Company and China Telecom, there will be no adjustment

to the consideration as a result of the price adjustment mechanism. The completion of the proposed CDMA

business disposal is subject to various conditions as set forth in the Framework Agreement.

— 7 —

On 27 July 2008, the Company, CUCL and China Telecom further entered into the CDMA business disposal

agreement (the “Disposal Agreement”). Pursuant to the Disposal Agreement , the Company and CUCL have

agreed to sell and China Telecom agreed to purchase: (i) the entire CDMA operation, which is owned and

operated by CUCL, together with the assets of CUCL which are relevant to the CDMA operations and the

rights and liabilities of CUCL relating to its CDMA subscribers, immediately prior to the completion date;

(ii) the entire equity interest in China Unicom (Macau) Company Limited (“Unicom Macau”, a subsidiary

of the Company); and (iii) 99.5% of the equity interest in Unicom Huasheng Telecommunications

Technology Company Limited (“Unicom Huasheng”, a subsidiary of CUCL) representing the entire equity

interest in Unicom Huasheng held by CUCL (collectively referred to as the “CDMA Business”). The scope

of the CDMA Business is set out in the Disposal Agreement and the detailed items will be confirmed by

the Company, CUCL and China Telecom in a final list of the detailed items of the CDMA Business which

will be agreed and finalised on or before the delivery date of the CDMA Business.

An extraordinary general meeting of the shareholders of the Company was held on 16 September 2008 at

which the shareholders approved the above Disposal Agreement. As all of the conditions of the CDMA

Business disposal as specified in the Disposal Agreement have been satisfied or are deemed to have been

satisfied, the CDMA Business disposal was completed on 1 October 2008. For details, please refer to the

section headed “Recent Developments”of this announcement.

As previously disclosed in the circular (the “CDMA Circular”) dated 1 August 2008 issued by the Company

in relation to, amongst others, the CDMA Business disposal, the estimated gain before tax arising from

disposal of CDMA Business was approximately RMB37.56 billion under Hong Kong Financial Reporting

Standards (“HKFRS”). For details of calculation of the estimated gain before tax, please refer to section 6

“Financial effects of the CDMA business disposal” of “Letter from the Board” in the CDMA Circular. The

amount to be recognised in the consolidated income statement of the Group for the year ending 31

December 2008 might be different from the estimated gain disclosed above and will only be finalised when

the detailed items of the CDMA Business are agreed by the Company, CUCL and China Telecom on or

before the delivery date which is a date within 60 days after 1 October 2008, i.e. the completion date of

the CDMA Business disposal.

On 2 June 2008, the Company and China Netcom jointly announced that the Company had formally

presented the share proposal, the American Depositary Share (“ADS”) proposal, and the option proposal to

the board of directors of China Netcom, and requested the China Netcom’s board of directors to put forward

the proposals to the shareholders of China Netcom to consider a merger of the Company and China Netcom

(“Proposed Merger”) by way of a scheme of arrangement of China Netcom (the “Scheme”) under Section

166 of the Hong Kong Companies Ordinance.

Pursuant to the aforementioned share proposal and ADS proposal, each holder of China Netcom share and

China Netcom ADS will be entitled to receive 1.508 new ordinary shares and 3.016 new ADSs of the

Company, respectively, for every China Netcom share and China Netcom ADS. For the option proposal, the

Company will establish a new option plan, and each holder of China Netcom option will be entitled to

receive new Unicom options to acquire the Company’s shares in exchange for their outstanding China

Netcom options (whether vested or not). The grant of these options will be based on a formula that values

the new options of the Company received by a holder of China Netcom options equivalent to the

“see-through” price of that holder’s outstanding China Netcom options.

An extraordinary general meeting of the shareholders of the Company was held on 16 September 2008 at

which the shareholders approved the resolutions described above and the Scheme was sanctioned by Hong

Kong High Court on 14 October 2008. As all of the conditions of the proposals and the Scheme as specified

in the Scheme document had been satisfied, the Scheme became effective on 15 October 2008. For details,

please refer to the section headed “Recent Developments” of this announcement.

— 8 —

On 19 August 2008, CUCL set up and incorporated Unicom Huakai which is principally engaged in sales

of handsets and telecommunications equipment and provision of technical services. CUCL hold 100% in the

entire issued capital of Unicom Huakai. The paid-in capital of Unicom Huakai is RMB500 million. As at

30 September 2008, Unicom Huakai has not yet commenced operations.

On 15 October 2008, as part of the Company’s integration with China Netcom, the Company entered into

an agreement with three of its wholly-owned subsidiaries, namely (i) China Netcom; (ii) CUCL and (iii)

CNC China, pursuant to which CUCL will merge with, and absorb, CNC China. The merged company will

retain the name of China United Network Communications Corporation Limited and will remain a

wholly-owned subsidiary of the Company.

The basis of preparation and the significant accounting policies and estimates adopted in the preparation

of the unaudited condensed consolidated financial information are consistent with those used in preparing

the annual financial statements for the year ended 31 December 2007 except that the Group changed the

accounting estimate on provision for subscriber points expenses for certain provincial branches, where there

were stabilised and reliable historical redemption statistics available. This change of estimate resulted in

the reversal of provision for subscriber points expenses for those provincial branches, based on the

historical redemption statistics, amounting to approximately RMB92 million for continuing operations and

approximately RMB57 million for discontinued operations for the nine months ended 30 September 2008.

Based on the Framework Agreement dated 2 June 2008, in accordance with HKFRS 5 “Non-current Assets

Held for Sale and Discontinued Operations” issued by the HKICPA (“HKFRS 5”), the assets and liabilities

of the CDMA Business disposal group, which includes the assets and liabilities of CDMA business segment

of the Group, as well as certain other telecommunications network assets and other assets in certain regions

(including certain jointly used CDMA base stations/auxiliary facilities and sales offices which will also be

sold to China Telecom), have been classified as held for sale and are carried at the lower of their carrying

amount and fair value less costs to sell since their carrying amount will be recovered principally through

a sales transaction rather than through continuing use since 2 June 2008. The scope and net carrying value

of such network assets and other assets may be different from the value of the detailed items of the CDMA

Business to be delivered to China Telecom and will be agreed and finalised on or before the delivery date

in accordance with the completion plan set out in the Disposal Agreement.

In addition, in accordance with HKFRS 5, the results and cash flows of the operations of the CDMA

business segment of the Group have been presented as discontinued operations in the unaudited condensed

consolidated income statement and cash flow statement of the Group for the nine months ended 30

September 2008, and the 2007 comparative figures for the unaudited condensed consolidated income

statement and cash flow statement were also re-presented as discontinued operations accordingly. For

details, please refer to Note 6.

— 9 —

As at 30 September 2008, the current liabilities of the Group exceeded the current assets by approximately

RMB22.4 billion (31 December 2007: RMB32.4 billion). Taking into account of available sources of

financing and continuous net cash inflows from operating activities, the Group has sufficient funds to meet

its working capital requirements and debt obligations. As a result, the unaudited condensed consolidated

financial information of the Group for the nine months ended 30 September 2008 have been prepared under

the going concern basis.

On 26 September 2003, the Company signed an agreement with 13 financial institutions for a long-term

syndicated loan of USD700 million. This facility was split into 3 tranches (i) USD200 million 3-year loan;

(ii) USD300 million 5-year loan; and (iii) USD200 million 7-year loan and carried an interest rate of 0.28%,

0.35% and 0.44% over US dollar LIBOR per annum for each tranche, respectively. In October 2003, the

Company and CUCL entered into an agreement to re-lend such funds to CUCL with similar terms to finance

the network construction of CUCL. The Company has fully repaid the USD200 million 3-year loan in 2006

and the USD300 million 5-year loan in September 2008.

In October 2008, the Company has obtained consent from the relevant lenders to prepay the USD200 million

7-year loan referred to above together with accrued interest on 13 November 2008. Upon such prepayment

being made, there will be no outstanding sum payable under the above loan facility.

Pursuant to the PRC enterprise income tax law passed by the Tenth National People’s Congress on 16 March

2007, the new enterprise income tax rates for domestic and foreign enterprises are unified at 25% and are

effective from 1 January 2008 (for the nine months ended 30 September 2007: 33%). However, for entities

operating in special economic zones that previously enjoyed preferential tax rates, the applicable tax rate

will be increased progressively to 25% over a five-year period.

Basic earnings per share for the nine months ended 30 September 2008 and 2007 were computed by dividing

the profit attributable to equity holders by the weighted average number of ordinary shares outstanding

during the periods.

Diluted earnings per share for the nine months ended 30 September 2008 and 2007 were computed by

dividing the profit attributable to equity holders by the weighted average number of ordinary shares in issue

during the periods, after adjusting for the effects of the dilutive potential ordinary shares. All potential

ordinary shares arose from (i) share options granted under the amended Pre-Global Offering Share Option

Scheme and (ii) share options granted under the amended Share Option Scheme. For the purpose of

computation of diluted earnings per share for the nine months ended 30 September 2007, the potential

ordinary shares which are not dilutive mainly arose from share options granted under the amended

Pre-Global Offering Share Option Scheme and are excluded from the weighted average number of ordinary

shares.

— 10 —

The following table sets forth the computation of basic and diluted earnings per share:

Numerator (in RMB thousands):

Profit attributable to the equity holders of the Company

- Continuing operations 5,310,160 4,529,188

- Discontinued operations 1,678,799 653,839

6,988,959 5,183,027

Denominator (in thousands):

Weighted average number of ordinary shares outstanding and shares used

in computing basic earnings per share 13,656,374 12,837,035

Dilutive equivalent shares arising from share options 125,346 115,203

Shares used in computing diluted earnings per share 13,781,720 12,952,238

Basic earnings per share (in RMB)

- Continuing operations 0.389 0.353

- Discontinued operations 0.123 0.051

0.512 0.404

Diluted earnings per share (in RMB)

- Continuing operations 0.385 0.350

- Discontinued operations 0.122 0.050

0.507 0.400

To enable an investor to better understand the Group’s results, below are tables reconciling earnings per

share to adjusted earnings per share for the Group and continuing operations respectively, excluding the

realised loss on changes in fair value of derivative component of convertible bonds for the nine months

ended 30 September 2007 which is not considered to be an indicator of the Group’s operating performance.

— 11 —

Profit attributable to equity holders of the Company 6,988,959 5,183,027

Adjustment for:

Realised loss on changes in fair value of derivative component of

convertible bonds — 568,860

Adjusted profit attributable to equity holders of the Company (excluding

realised loss on changes in fair value of derivative component of

convertible bonds) 6,988,959 5,751,887

Adjusted basic earnings per share (excluding realised loss on changes in

fair value of derivative component of convertible bonds) (RMB) 0.512 0.448

Adjusted diluted earnings per share (excluding realised loss on changes

in fair value of derivative component of convertible bonds) (RMB) 0.507 0.444

Profit from continuing operations attributable to equity holders of the

Company 5,310,160 4,529,188

Adjustment for:

Realised loss on changes in fair value of derivative component of

convertible bonds — 568,860

Adjusted profit from continuing operations attributable to equity holders

of the Company (excluding realised loss on changes in fair value of

derivative component of convertible bonds) 5,310,160 5,098,048

Adjusted basic earnings per share for continuing operations (excluding

realised loss on changes in fair value of derivative component of

convertible bonds) (RMB) 0.389 0.397

Adjusted diluted earnings per share for continuing operations (excluding

realised loss on changes in fair value of derivative component of

convertible bonds) (RMB) 0.385 0.394

— 12 —

All the assets and liabilities related to the CDMA Business constituted a disposal group and have been

presented as held for sale upon the entering of the Framework Agreement in accordance with HKFRS 5,

these included the assets and liabilities of the CDMA business segment as well as certain

telecommunications network assets and other assets in certain regions (including certain jointly used

CDMA base stations/auxiliary facilities and sales office which will also be sold to China Telecom). The

scope and net carrying value of such network assets and other assets are estimated based on the initial

agreement between the Group and China Telecom, which may be different from the value of the detailed

items of the CDMA Business to be delivered to China Telecom and will be agreed and finalised on or before

the delivery date in accordance with the completion plan set out in the Disposal Agreement.

All the assets and liabilities classified as held for sale were remeasured to the lower of their carrying

amount and fair value less costs to sell at the date of their classification on 2 June 2008 as held for sale

and no further remeasurement adjustment was recorded as at 30 September 2008. In addition, the property,

plant and equipment, direct incremental costs associated with upfront non-refundable revenue included in

“other assets”, and deferred CDMA customer acquisition costs included in “other assets” and “prepayments

and other current assets” ceased to be depreciated and amortised from 2 June 2008. The depreciation and

amortisation of such assets classified as held for sale would have been approximately RMB1,385 million

for the period from 2 June 2008 to 30 September 2008 if they had been subject to depreciation and

amortisation during such period.

As at 30 September 2008, the following assets and liabilities of the disposal group have been classified to

the assets and liabilities held for sale in the unaudited condensed consolidated balance sheet:

Property, plant and equipment 1,924,456

Goodwill 373,000

Other assets 4,020,406

Inventories 538,840

Accounts receivable, net 645,869

Prepayments and other current assets 663,910

Cash and cash equivalents 4,581,476

Deferred revenue 310,896

Deferred income tax liabilities 36,524

Payable and accrued liabilities 1,279,892

Tax payable 8,621

Advances from customers 4,675,958

— 13 —

On 2 June 2008, the Group announced the proposed disposal of the CDMA Business (please refer to Note

1 for details). Accordingly, the results and cash flows of the CDMA business segment (including the CDMA

business of CUCL, Unicom Huasheng and Unicom Macau) are presented in this unaudited condensed

income statement and cash flow statement as discontinued operations. In addition, the elimination entries

on the intersegment revenue and charges between continuing operations and discontinued operations were

recorded against the discontinued operations.

The results of operations of the discontinued operations for the nine months ended 30 September 2008 and

2007 are set out below:

Revenue (Turnover) 22,471,431 23,944,651

Leased lines and network capacities (6,078,672) (6,388,817)

Interconnection charges (1,944,295) (1,898,730)

Depreciation and amortisation (410,749) (471,848)

Employee benefit expenses (1,538,741) (1,328,801)

Selling and marketing (4,965,023) (6,468,649)

General, administrative and other expenses (2,651,493) (2,446,966)

Cost of telecommunications products sold (2,644,047) (3,891,940)

Financial costs (6,619) (8,539)

Interest income 10,335 9,549

Other gains - net 20,431 3,304

Profit before income tax from discontinued operations 2,262,558 1,053,214

Income tax expenses (582,287) (398,321)

Profit after income tax from discontinued operations 1,680,271 654,893

The cash flow information of the discontinued operations for the nine months ended 30 September 2008 and

2007 is set out below:

Net cash inflow from operating activities 655,697 517,961

Net cash outflow from investing activities (22,548) (47,457)

Net cash inflow from financing activities — —

— 14 —

The Group had the following related party transactions, from continuing operations and discontinued

operations, with Unicom Group and its subsidiaries included in revenue and costs and expenses:

- Revenue 28,386 38,997

- Costs and expenses 667,590 588,424

- Revenue — —

- Costs and expenses 6,144,338 6,455,928

The purchase of Guizhou Business has been accounted for using merger accounting in accordance with AG

5 issued by the HKICPA. Accordingly, the transactions between Guizhou branch of Unicom Group and the

Group were eliminated and not considered as related party transactions in the unaudited condensed

consolidated financial information.

Please refer to the section headed “Recent Developments” of this announcement for details.

2007 comparative figures have been restated to reflect the effects of Business Combination under common

control (i.e. the purchase of Guizhou Business), which was accounted for using merger accounting in

accordance with AG 5. In addition, the results and cash flows of the CDMA business segment have been

re-presented as discontinued operations in accordance with HKFRS 5 and therefore, the 2007 comparative

figures of the unaudited condensed consolidated income statement and cash flow statement were also

restated accordingly.

— 15 —

For the first three quarters of 2008, the Company proactively addressed various challenges

including market competition and adjustments to domestic roaming tariffs. While

maintaining effective business development, the Company continued to explore new markets

and to keep sustainable steady growth in all businesses.

For the first three quarters of 2008, our revenue from continuing operations increased

steadily and reached RMB52.48 billion, up by 3.0% from the same period of last year

(Note 2). Of the total revenue, service revenue was RMB52.44 billion, up by 3.0% from

the same period of last year.

Service revenue from our GSM cellular business for the first three quarters of 2008 was

RMB48.45 billion, up by 2.8% from the same period of last year. The average minutes

of usage (“MOU”) per subscriber per month were 247.3 minutes and the average

revenue per subscriber per month (“ARPU”) was RMB42.8. Service revenue from long

distance, data and Internet business was RMB3.99 billion, up by 5.6% from the same

period of last year.

For the first three quarters of 2008, total costs and expenses from continuing operations,

including financial gains, interest income and other gains, were RMB45.26 billion, up

by 3.0% from the same period of last year. Among which, selling and marketing

expenses were RMB8.20 billion, up by 3.9% from the same period of last year;

depreciation and amortisation expenses were RMB16.15 billion, down by 2.4% from the

same period of last year.

For the first three quarters of 2008, profit before income tax from continuing operations

was RMB7.22 billion, up by 3.3% from the same period of last year. Among which,

profit before income tax from GSM cellular business was RMB7.29 billion; profit

before income tax from long distance, data and Internet business was RMB0.42 billion.

EBITDA (Note 3) from continuing operations was RMB23.05 billion and EBITDA

margin (EBITDA as a percentage of total revenue) was 43.9%. EBITDA margin for GSM

cellular business was 42.8%.

— 16 —

For the first three quarters of 2008, profit for the period from discontinued operations, i.e.

CDMA cellular business which is also classified as held for sale, was RMB1.68 billion.

For the first three quarters of 2008, profit for the period (Note 4) was RMB6.99 billion

(including profit from continuing operations of RMB5.31 billion and profit from

discontinued operations of RMB1.68 billion). Basic earnings per share was RMB0.512 and

basic earnings per share for continuing operations was RMB0.389.

Note 1: On 2 June 2008, the Company, the Company’s wholly-owned subsidiary, CUCL and China Telecom

entered into the CDMA business framework agreement whereby CUCL will sell, and China Telecom

will purchase, the CDMA Business. (Please refer to the Announcement on (1) Proposed Disposal of

the CDMA Business by Unicom to Telecom (2) Proposed Major Transaction (3) Possible Connected

Transaction and (4) Resumption of Trading issued on 2 June 2008). According to the above framework

agreement and the progress of negotiations made between China Telecom and the Company, in

accordance with the HKFRS 5, the management of the Company presented the proposed disposal of

assets and liabilities on the unaudited condensed consolidated balance sheet as at 30 September 2008

as assets and liabilities classified as held for sale. In addition, the management of the Company

recognised the CDMA business segment as discontinued operations, accordingly, profit from

discontinued operations are presented separately in the unaudited condensed consolidated income

statement and cash flow statement for the nine months ended 30 September 2008. The 2007

comparative figures of the unaudited condensed consolidated income statement and cash flow

statement were also restated accordingly. For details, please refer to Note 6 to unaudited condensed

consolidated financial information for the nine months ended 30 September 2008.

Note 2: Upon the adoption of HKFRS in 2005, merger accounting is used by the Group to account for the

combination of entities and businesses under common control in accordance with HKFRS 3 “Business

Combinations” and AG 5 issued by the HKICPA. Accordingly, the results of operations and financial

position of Guizhou Business are included in the consolidated financial statements of the Group as

if they were always part of the Group from the beginning of the earliest period presented. As a result,

comparative figures have been restated.

Note 3: EBITDA represents profit for the period before interest income, financial gain, other gains-net,

income tax and depreciation and amortisation. As the telecommunications business is a capital

intensive industry, capital expenditures and financial gain may have a significant impact on the net

profit of the companies with similar operating results. Therefore, we believe EBITDA may be helpful

in analyzing the operating results of a telecommunications service operator like our Company.

Although EBITDA has been widely applied in the global telecommunications industry as indicator to

reflect the operating performance, financial capability and liquidity, it should be considered in

addition to, and is not a substitute for or superior to, the measure of financial performance prepared

under generally accepted accounting principles (“GAAP”) as it does not have any standardised

meaning under GAAP and is not regarded as measures of operating performance and liquidity under

GAAP. In addition, it may not be comparable to similar indicators provided by other companies.

Note 4: The new enterprise income tax law is effective from 1 January 2008 and the enterprise income tax rate

is changed from 33% to 25%. For entities operating in special economic zones that previously enjoyed

preferential tax rates, the applicable tax rate will be increased progressively to 25% over a five-year

period. The effective tax rate of continuing operations for the nine months ended 30 September 2008

was 26.4 % while the effective tax rate for the same period of last year was 35.1%.

— 17 —

This announcement contains the Group’s financial information for the first three quarters

ended 30 September 2008. Subsequently, there have been significant developments in the

business and operations of the Company which are expected to have a material impact on the

business, financial and trading prospects of the Group. These developments are summarized

below.

On 2 June 2008, the Company, China United Network Communications Corporation

Limited (“CUCL”, formerly known as “China Unicom Corporation Limited”, a

wholly-owned subsidiary of the Company), and China Telecom Corporation Limited

(“China Telecom”) entered into a CDMA business disposal framework agreement which

sets out the terms and conditions on which the Company, CUCL and China Telecom will

proceed with the CDMA business disposal whereby CUCL will sell, and China Telecom

will purchase, the CDMA business of CUCL. On 27 July 2008, the Company, CUCL and

Telecom further entered into a CDMA business disposal agreement which sets out the

detailed terms and conditions on which CUCL and the Company will sell, and China

Telecom will purchase, the CDMA business. The consideration for the CDMA business

disposal is RMB43.8 billion and is payable in cash by China Telecom in three

installments. The consideration is subject to a price adjustment mechanism, which is

based on the CDMA service revenues generated by the Group for the two six-month

periods ended 30 June 2007 and 30 June 2008, respectively, as set out in the circular

issued by the Company dated 1 August 2008 (the “CDMA Circular”). Based on the

CDMA service revenues generated by the Group for the two six-month periods ended 30

June 2007 and 30 June 2008, respectively, and as agreed by the Company and China

Telecom, no adjustment was made to the consideration.

In connection with the CDMA business disposal, on 27 July 2008, CUCL agreed to

waive its right to exercise its option to purchase the CDMA network from Unicom New

Horizon Mobile Telecommunications Company Limited (“Unicom New Horizon”) and

to terminate the CDMA lease pursuant to which CUCL leases capacity on the CDMA

network from Unicom New Horizon, in each case with effect from the completion of the

CDMA business disposal.

Details of the CDMA business disposal have been set out in the announcement issued

by the Company on 28 July 2008 and the CDMA Circular. You may download and view

these documents from the Company’s website at www.chinaunicom.com.hk, the Hong

Kong Stock Exchange’s website at www.hkexnews.hk, or United States Securities and

Exchange Commission (the “SEC”) website at www.sec.gov.

— 18 —

As the CDMA business disposal constitutes a major transaction for the Company under

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong

Limited (the “Listing Rules”), it was subject to the approval of the Company’s

shareholders. As the waiver by CUCL of the option to purchase the CDMA network and

the termination of the CDMA lease constitute connected transactions for the Company

under the Listing Rules, they were subject to the approval of the independent

shareholders of the Company.

Pursuant to the shareholders’ meeting held on 16 September 2008, the Company’s

shareholders approved the CDMA business disposal and the Company’s independent

shareholders approved the waiver by CUCL of the option to purchase the CDMA

network and the termination of the CDMA lease. As all of the conditions of the CDMA

business disposal as specified in the CDMA business disposal agreement have been

satisfied or are deemed to have been satisifed, the CDMA business disposal was

completed on 1 October 2008. On 1 October 2008, China Telecom became the legal

owner of the CDMA business and all the rights, interests, obligations and liabilities in

relation to the CDMA business will be borne by China Telecom. The Company, CUCL

and China Telecom will continue to cooperate with each other to complete the relevant

procedures and take all relevant actions to effect the delivery of the CDMA business to

China Telecom within 60 days after 1 October 2008 in accordance with the terms of the

CDMA business disposal agreement. The Company received the first installment of the

consideration in the amount of RMB30.66 billion, being 70% of the consideration, in

cash from China Telecom on 4 October 2008.

On 2 June 2008, the boards of directors of the Company and China Netcom Group

Corporation (Hong Kong) Limited (“China Netcom”), jointly announced that the

Company had formally presented to the board of directors of China Netcom, and

requested the board of directors of China Netcom to put forward to the shareholders of

China Netcom for consideration, the proposals relating to the merger of the Company

and China Netcom (the “Proposals”) by way of a scheme of arrangement of China

Netcom under Section 166 of the Companies Ordinance (Chapter 32 of the Laws of

Hong Kong) (the “Scheme”). Details of the Proposals and the Scheme has been set out

in the circular issued by the Company dated 15 August 2008 (the “VSA Circular”),

which also includes, in Appendix IV to the VSA Circular, the full text of the document

in respect of the Scheme (the “Scheme Document”). You may download and view the

VSA Circular from the Company’s website at www.chinaunicom.com.hk, the Hong

Kong Stock Exchange’s website at www.hkexnews.hk, or the website of the SEC’s at

www.sec.gov.

As the Proposals constitute a very substantial acquisition for the Company under the

Listing Rules, they were subject to the approval of the Company’s shareholders.

Pursuant to the shareholders’ meeting held on 16 September 2008, the Company’s

shareholders approved the Proposals and the terms of the Scheme. As all of the

conditions of the Proposals and the Scheme as specified in the Scheme Document had

been satisfied, on 15 October 2008, the Scheme became effective. China Netcom

became a wholly-owned subsidiary of the Company and the listings of China Netcom’s

shares and ADSs on the Hong Kong Stock Exchange and the New York Stock Exchange,

respectively, were withdrawn.

— 19 —

The Company intends to continue with the existing business of China Netcom and has

no intention to introduce any major changes to the business of China Netcom or to

redeploy any fixed assets of China Netcom and its subsidiaries (the “Netcom Group”).

The enlarged group is expected to be an integrated telecommunications operator

offering wireless, fixed-line, broadband, data and value-added services to its

subscribers, and is expected to be granted a 3G license. The Company intends to take

measures to combine the respective experience and technologies of the Group and the

Netcom Group in the wireless and fixed-line businesses, to promote business innovation

and competitiveness and to improve operating and financial performance through

developing targeted business strategies according to the dynamic market developments.

By combining the resources and business strengths of the Company and China Netcom

in different areas, and upon obtaining a license for mature 3G technology, it is intended

that the enlarged group will aim to become a world-class provider of broadband

communications and information services, establishing competitive advantages in

technology, products and services, providing professional and multi-tiered information

services and satisfying the changing and diverse needs of China’s telecommunications

market.

Upon the Scheme becoming effective on 15 October 2008, the name of the Company

used by the Company, and the ticker symbol on the New York Stock Exchange of the

Company, remain unchanged.

The Board wishes to remind investors that the unaudited financial information and the

financial outline for the first three quarters ended 30 September 2008 are based on the

Group’s internal records and management accounts and have not been reviewed or audited

by the auditors. The financial information for the first three quarters ended 30 September

2007 are extracted from the unaudited financial information of the Group and have been

restated, and the financial information for the year ended 31 December 2007 are extracted

from the audited financial statements as contained in the 2007 Annual Report.

— 20 —

Investors are cautioned not to unduly rely on financial data, statistics and comparison for the

By Order of the Board

Hong Kong, 30 October 2008

Wu Jinglian, Cheung Wing Lam Linus, Wong Wai Ming,

John Lawson Thornton and Timpson Chung Shui Ming

— 21 —